Malta has become far more attractive as a place in which to invest in property that is then rented out, according to a new European study.
According to a buy-to-let table just published by international payments firm WorldFirst, Malta is the second most attractive location for such investment, surpassed only by Ireland, also registering above average national economic growth.
The table, which compares the cost of real estate and rental income yield, shows that this year, an investor will make a 6.64 per cent return in Malta.
The island ranked second among 29 European Union Member States in terms of average rental yield.
Average rental yields in Portugal (6.43 per cent), the Netherlands (6.27 per cent) and Slovakia (6.12 per cent) are deemed also to have a good return on investment.
On the other end of the scale, the worst place one can invest in a buy-to-rent property is Sweden, where the average rental yield stands at 3.03 per cent.
In Sweden, rents are controlled by the government and a landlord cannot raise rents arbitrarily.
Malta’s boost in the buy-to-let rankings arrived on top of a booming rental market driven by a high demand for well-paid foreigners working particularly in the iGaming and financial services sectors.
The influx of foreigners to Malta has seen the rental market rise across the island, with average monthly rents doubling and in some areas even tripling over recent years.
Although this has resulted in a bonanza for landlords, it is having negative repercussions, particularly on locals, who are finding it increasingly difficult to keep up with the higher rates. Others risk being driven out of the market, with landlords preferring to rent their properties to foreigners and charging higher rates.
NGOs have been calling on the government to intervene in the uncontrolled rent spiral. Developers and real estate agents dismiss the calls, insisting the government should subsidise rents instead.
The government referred to the matter in the Budget presented yesterday.