Demand for residential and office space across the Grand Harbour region is on the decline, with asking prices continuing to dip, but the cost of retail rentals has doubled over the past year, a new KPMG report published this week revealed.
The report paints a picture of a region which appears to be bucking the trend in some respects.
Property prices across Malta’s other five regions have rebounded from a slight drop last year, to now register slight increases, ranging from a 1% rise in Gozo to a 12% increase in Malta’s north-west areas.
But a finished apartment in any of the Grand Harbour towns, which include Valletta, Floriana and the Cottonera, among others, will now set you back €2,795 per square metre, almost €1,000 less than it would have back in 2022.
This means that asking prices in the region, once the most expensive in the country, have dropped by over a quarter in just two years, suggesting that estate agents in these towns are struggling to find buyers willing to meet their demands.
Likewise, the region also appears to be experiencing a downward trend when it comes to rental prices for homes and office spaces, with the former growing by only 3.5% (far below other regions) and the latter dropping by 2%.
But rental prices for retail properties in the region have doubled in the past year to reach €494 per square metre, making it the country’s most expensive retail location, by some distance.
A young couple on minimum wage can forget about 95% of properties that are for sale, as can young single people on an average wage
Nationwide, apartment prices up 51% in seven years
More broadly, the report finds that property prices across the country have continued to increase throughout this year.
The cost of an apartment has gone up by 51% over the past seven years, the report finds, highlighting how an apartment that would set you back €180,000 back in 2017 will now cost €272,000.
The median price of properties in Malta throughout 2024 ranged from €285,000 for an apartment to a staggering €1.9 million for a villa.
But properties are more affordable today
Nevertheless, data suggests that property is more affordable today than at any point since 2017, KPMG says, with the price-to-income ratio dropping slightly this year.
The price-to-income ratio looks at the relationship between the median income and the median price of an apartment, finding that this has dropped from a high of 17.3 in 2019 to 14.2 today.
This means that while the median apartment cost a little over 17 times a person’s income back in 2017, it is now just over 14 times more expensive than the typical person’s income this year.
But housing affordability is not the same for everyone, the report says, with some people likely to struggle to find a property they can afford.
Two-thirds of properties on the market are out of reach for a young couple in elementary jobs with a joint income of €32,000, the report says.
Likewise, a young couple on minimum wage can forget about 95% of properties that are for sale, as can young single people on an average wage.