Sustainability trends in Malta’s property market

There is a clear gap between how buyers view energy performance when purchasing a property and how they prioritise it once they become owners. This insight sits at the heart of the sustainability findings presented in the 9th edition of the Construction Industry and Property Market Report, prepared by KPMG and commissioned by the Malta Development Association.

The publication brings together the latest data, insights from industry stakeholders, and results from KPMG’s own property market database, with the study supported by the Property Malta Foundation, Bank of Valletta p.l.c., BNF Bank p.l.c., FCM Bank Ltd., and HSBC Bank Malta p.l.c. The full report is available for download here. 

Based on survey results from adults residing in Malta and building on three consecutive years of research, this year’s findings reveal how sustainability is increasingly shaping attitudes in Malta’s residential property market – while still competing with long-standing practical and financial considerations.

The striking divergence between purchase-stage behaviour and post-purchase investment suggests that although homeowners recognise the benefits of energy-efficient upgrades, these advantages are not yet fully factored into the initial property search. In addition to price, traditional factors such as location, size and layout continue to dominate purchasing decisions. However, once individuals become homeowners, energy performance and other sustainability features, such as water efficiency, become higher priority, with almost 60 per cent of surveyed property owners having already undertaken retrofit works or planning to do so.

This pattern points to a possible awareness gap, where the long-term economic and environmental benefits of sustainability features are not yet fully integrated into how value is assessed at the moment of purchase.

The research also brings attention to a broader trade-off that consumers are making between the sustainability of a building and the sustainability of its surroundings. Many respondents expressed a preference for properties with sea views or proximity to green spaces, even if these offered fewer built-in sustainable features. This highlights the extent to which environmental quality, liveability and access to nature influence residential choices. It also reinforces the importance of viewing sustainability holistically – recognising that the surrounding environment plays a crucial role in wellbeing and overall quality of life.

Financial incentives remain a driving force behind sustainability investments, with nearly half of surveyed property owners ranking retrofit incentives highly on a usefulness scale. These results demonstrate the effectiveness of well-designed incentives in reducing financial barriers and encouraging energy-efficient and other sustainability upgrades in a market where affordability can be challenging. The report also underscores the growing responsibility of the banking sector in shaping sustainability outcomes through green lending products and financing models that reward environmentally responsible choices. As ESG expectations and regulations continue to evolve, banks have an increasingly important role in steering the market toward sustainable development.

Despite these positive developments, several tensions persist within Malta’s property landscape. Respondents repeatedly emphasised the desire for homes to be both affordable and sustainable – an objective that remains difficult to balance given rising construction costs, strong market demand and limited land availability. At the same time, Malta’s demographic realities are creating ongoing demand for new housing, even as the public increasingly prioritises the preservation of green spaces and high-quality natural environments. These competing pressures underscore the complexity of achieving sustainability in a small and densely populated island context.

Overall, the ESG themes emerging from this year’s report point to a market in transition. Sustainability is increasingly visible in public attitudes, household investment patterns and financial sector priorities. Yet systemic constraints and competing needs continue to influence outcomes. Delivering a built environment that balances affordability, environmental responsibility and quality of life will require coordinated

effort across policymakers, building professionals, developers and the financial sector, as well as clearer communication of the long-term benefits – economic, social and environmental – that sustainable choices can provide.

Rachel Decelis, sustainability lead for KPMG in Malta.