Residential property prices are continuing to post strong growth, the Central Bank reported in its ongoing survey of asking prices.
The index of advertised prices went up by 4.8 per cent, following a 5.3 per cent increase in the first quarter of 2015. This was the seventh consecutive quarter of a strong year-on-year rise following a period of decline or weak growth.
"This upward movement in prices may be partly influenced by government measures supporting demand for property in Malta. The latter have included the introduction of the Individual Investor Programme, which targets high net worth individuals, and a fiscal incentive for first-time buyers announced in the government’s Budget in November 2013, and subsequently extended. The effects of these measures may be spilling over into 2015," the bank said.
It explained that the slight deceleration in the annual growth rate of property prices in the second quarter of this year was due to a slowdown in the rate of change in prices for maisonettes. Price inflation for this type of property eased to 4.1 per cent from 10.4 per cent in the previous quarter.
Weaker growth in maisonettes’ prices was partially offset by a pick-up in the growth rate of apartment prices, which make up almost three-fifths of properties in the sample. Apartment prices were at the highest level since the bank’s index began in 2000, with the annual rate of change of 9 per cent in the second quarter, up from 6.8 per cent three months earlier.
Price increases for “other” properties - town houses, houses of character and villas, resumed, with a 4.6 per cent second-quarter increase on a year earlier following a small decline in the previous quarter.
The asking price for terraced houses fell by 2.6 per cent on its year-ago level, a significantly weaker decline than the 5.4 per cent recorded three months earlier. This was the third consecutive quarter of negative growth rates.