Young single people on an average income are unable to afford 95% of properties on the market, according to a new study.

The analysis found that a single buyer in their late 20s earning a wage of €21,000, roughly Malta’s average income, can only afford to buy a property worth a maximum of €171,000.

Only 5.2% of finished apartments on the market fall under this bracket.  

The analysis, by accountancy giant KPMG, was presented by its Malta director Steve Stivala at a conference marking the launch of the firm’s annual report on the construction industry and the property market.

The report has been published each year since 2017 and is commissioned by the Malta Developers’ Association.

Affordability crisis

Stivala said that data sheds light on ongoing concerns about the affordability of Malta’s property market.

While couples fare better, Stivala said that they may also need to make significant compromises in order to find a suitable home.

The study found that a young couple working in "elementary jobs" is unable to afford over 60% of properties on the market. This drops to a paltry 4.4% for couples on the minimum wage.

Despite this, Stivala said, the data shows that the affordability of Malta’s housing has improved marginally since last year. Whereas the average property cost 15.4 times more than the average wage in 2022, this has dipped slightly to 14.6 this year.

One-bedroom apartments

Housing Authority CEO Matthew Zerafa said the construction sector needs to do a better job of reflecting the demands of the market.

He pointed to a Housing Authority study that found that many first-time buyers are single households, arguing that despite this, Malta still mostly builds two and three-bedroom apartments.

This was echoed by Michael Bonello, CEO of Alliance Group, who argued that planning policies need to be revised to allow for smaller apartments to be developed.

Developers need to work with ‘more love’

MDA president Michael Stivala told attendees that developers need to work “with more love”, saying that they need to be more aware of the inconvenience that their work causes their residents.

“We need to work as though the neighbour was our own mother and ask ourselves, would we do this to our mother?”

In a barbed reply from the floor, former ADPD chair Carmel Cacopardo quipped that residents in Gżira subjected to his company’s developments might be surprised to hear Stivala’s “tear-jerking words”.

MDA Chair Michael Stivala speaking on Friday. Photo: Chris Sant Fournier

Apply 'brakes' to construction sector

In a scathing critique of the construction industry, PL MEP Alfred Sant called for a moratorium on excessive development, saying that there needs to be broad consensus to “apply brakes to the sector” to stop the country wasting its land in “an incredibly savage manner”.

“What the construction industry considers externalities – traffic, pollution, noise – are an intrinsic part of Malta’s social life. If we go on like this we might do well for a while, but we will eventually have to face the music”, he warned.

Economist and BOV chair Gordon Cordina had a similar view.

Drawing a parallel with Malta’s greylisting, when he said the country banded together to get itself out of a fix, he argued that a similar approach is needed to address problems in the building sector.

“If we’re not careful, we will have to go for this brake whether we like it or not, so we’d better do something to correct matters before it’s too late”.

The conference was attended by industry experts, including architects, real estate operators and developers. Photo: Chris Sant Fournier

SPED review approaching completion

The conference was characterised by widespread agreement that revisions to Malta’s planning policies are long overdue.

“The scenario has changed over the past ten years, yet we’re still working with local plans and guidelines that are decades old”, said Sandro Chetcuti, chair of Property Malta, himself once a chair of MDA.

This was echoed by several other industry experts, including Kamra tal-Periti president Andre Pizzuto.

Closing the conference, Planning Minister Stefan Zrinzo Azzopardi claimed that the long-awaited review of SPED, the Planning Authority’s guiding document, will be completed shortly.

The review was first announced in 2020 and was meant to be ready for consultation last June.

The SPED is the highest point of the legal hierarchy of planning laws and policies and supersedes all others. Zrinzo Azzopardi pledged the new SPED will focus on the concept of "better, not more".