During this year’s Global Real Estate Transparency Index (GRETI) issued by global real estate services company Jones Lang LaSalle, Malta continued to rank in the higher end of the Low Transparency category, with a composite score of 3.54.
Malta placed 58th among the 89 participant countries, lagging behind other European countries. Other countries within the Low Transparency category include Mauritius, Puerto Rico, Morocco, and Botswana, among others.
The results for Malta are in line with those achieved during the 2022 edition of the GRETI, indicating a lack of improvement in the transparency of the local real estate market.
Malta continued to score relatively well on fronts such as governance of listed vehicles and the transaction process. In terms of the regulatory and legal aspects, Malta also achieved a favourable score; however, better enforcement of regulations is vital, particularly in relation to safety standards for buildings. Also, further clarity is required in relation to planning processes and requirements, and measurement standard definitions for valuation purposes to ensure consistent interpretation and adoption of standards.
The results for Malta highlight real estate sustainability and availability of data as key priority areas to improve transparency within the local real estate market. In fact, it comes as no surprise that the EU Commission has recently commented that Malta’s progress towards the Union’s climate-neutrality objective appears largely insufficient. This is particularly relevant given Malta’s building and real estate sector was highlighted as a key focus to help in the achievement of Malta’s national emissions targets.
Better enforcement of regulations is vital, particularly in relation to safety standards for buildings
In terms of availability of data, a significant improvement has been registered by other countries in this year’s edition of the GRETI; however this is not the case locally. Although slight progress has been noted in terms of the recent introduction of the Housing Authority’s Rent Calculator, data is relatively scant across all categories of local properties. Data in relation to contracted property prices, vacancy rates, gross capitalisation rates as well as stock of property by type is, in most cases, not collated and/or not publicly available. The practices adopted by other participating countries indicate how the use of technology may allow for new, more granular and higher frequency data, while ensuring that data is constantly kept up to date.
From a sustainability point of view, although progress has been made in terms of the creation of policies and incentives to incorporate green features and measures in buildings, Malta’s real estate market lags behind from a transparency perspective. Some initiatives that may be adopted locally in this field comprise enforcing regulations and tightening minimum energy-performance standards for new and existing buildings to drive greater energy efficiency and reduce greenhouse gasses; enabling public access to energy-performance certification data; or extending climate risk reporting to be required for all building types.
The results of the GRETI therefore highlight key priority areas for Malta to focus on to improve transparency in the local real estate market and hopefully move out of the ‘Low Transparency’ category. This will enhance the level of trust and continue to ensure sustainability of the industry moving forward.
What is the GRETI?
GRETI is an index based on a combination of quantitative market data and survey results that has been published by Jones Lang LaSalle since 1999 on a biennial basis.
While this year’s index marks the 13th edition, it is the second one that Malta has been included in. The index scores property markets on a one-to-five transparency scale (ranging between Highly Transparent to Opaque) and acts as an essential guide for companies operating in foreign markets and a unique benchmark of real estate market transparency.
Over the past few months, PwC Malta has been working on Malta’s second contribution to the GRETI as part of a projecting collaboration with Jones Lang LaSalle and Archi+.
PwC Malta led the compilation of survey results for Malta through consultations with key stakeholders in the public and private sector, including real estate investors, key developers, architects, lawyers, notaries, real estate agents, and property managers. The index, based on Jones Lang LaSalle’s methodology, focuses on topics such as direct property indices, availability of property data in connection with transactions, valuations, the use of real estate technology in construction and property management (among others), real estate tax, land use planning, professional standards of agents, green building regulations and sustainability.
To read the report, visit the website below.