As we approach the close of 2023, it’s undeniable that the real estate landscape in Malta has experienced both challenges and opportunities this year. In this article, I will delve into the current market conditions, providing insights and guidance for potential buyers and investors.
The persistent housing shortage of readily available properties has been a prevailing concern, but there’s optimism that the situation may see slight improvements. Despite this, the overall lack of inventory is expected to exert pressure on house prices.
However, our advice for those who are financially prepared is that the market conditions should not be a deterrent. The mantra remains: If you’re ready, start looking.
The property market’s resilience is evident in the upward trajectory of the Property Price Index (PPI). Government initiatives, such as first-time and second-time buyer schemes and reduced taxes for both sellers and buyers for property situated in urban conservation areas (UCAs) support the demand for property.
The recovering tourism sector, coupled with an increase in migrant workers which boosted rental demand, may further fuel property prices. Robust employment levels, wage growth and remaining savings from government pandemic support schemes contribute to sustained demand.
Inflation, often perceived as a financial adversary, can actually work in favour of real estate investors
Inflation, often perceived as a financial adversary, can actually work in favour of real estate investors. Property values tend to appreciate over time, and higher rental rates can offset the impact of inflation. Real estate also serves as a hedge against inflation, safeguarding the value of investments. As we navigate through economic uncertainties, diversifying into real estate provides stability and potential returns.
The moderate GDP growth rate in Malta projected at 4% in 2023 and remaining robust at 4% in 2024 and 4.2% in 2025, signifies stability.
This economic strength not only provides a safe haven for investors but also allows for potential increases in property values over time. While rising construction costs pose challenges, prime real estate in Malta remains fundamentally sound. Low vacancy rates, strong rent growth and favourable supply/demand dynamics across most segments paint a positive picture for prospective investors.
The real estate market may not be entirely buyer-friendly, but as the saying goes, “the best time to buy a house is when you can afford it”.
Waiting might mean facing higher prices. In Malta, mortgage interest rates have remained relatively low, presenting an opportunity for those ready to take the plunge.
In the realm of real estate, as in life, challenges and opportunities coexist. Navigating this landscape requires a discerning eye, financial readiness and a willingness to seize the moment.
As we step into a new year, let’s continue to explore the possibilities that the real estate market in Malta has to offer.
Darren De Domenico is Frank Salt Real Estate COO.