One in every seven people in Malta lives in rented accommodation, according to the head of the Housing Authority.  

Leonid MacKay was speaking during the launch of the government’s latest residential rental study, published on Tuesday, which he said had finally answered the question of how many people in Malta are tenants. 

“One in every seven in Malta and Gozo is living in rented accommodation. This long-standing question has now been answered and it shows how significant this sector is," he said.

The new rental study is the second of its kind since the government moved in to regulate the sector in 2020.  

The paper found that around 19,000 rental contracts were cut short during 2021 as the pandemic hit tenants and landlords. However, an analysis on affordability found that while the market dipped in 2020, it had already bounced back by the end of last year. 

The report is written by a group of economists, policy advisors, and academics and is based on anonymised data from the Housing Authority’s rent register introduced in 2020. 

What did the report find?

By the end of 2021 the rental contract register had 37,976 new active contracts, up by 49% over the previous year when it stood at 25,487. 

While the distribution of contracts based on property size and location remained fairly unchanged, some minor differences were noticed in the duration of contracts.  

The share of long leases increased to 96%, up from 95% in 2020.  On the other hand, shared spaces dropped by 1% to 4% of leases.

Contracts with a duration of one and two years make up some four-fifths of all the agreements registered with the authorities.

However, the share of one-year contracts has declined mostly because of renewals.  

Some 80% of rental contracts consist of apartments, followed by maisonettes (12%) and houses (8%), while the share of villas stood at less than 1%. 

In terms of size, most of the contracts registered are for two-bedroom (42%) and three-bedroom (33%) properties, respectively.

The share of one-bedroom properties stands at 21%, with the remaining 4% of contracts comprising larger properties with four or more bedrooms. 

Where do tenants live?

Around 93% of all active rental contracts registered with the Housing Authority are in Malta, with the remaining 7% situated in Gozo.  The Northern part of the island is home to the most rental agreements, accounting for around 70% of all rental contracts.  

The lowest concentration of rents is found in the Western region, with only 5% of contracts.

The largest concentration is found in St Paul’s Bay, with 6,011 contracts that amount to 16% of all residential contracts registered with the Housing Authority at the end of 2021. 

This is followed by four localities in the Northern Harbour region, namely Sliema (3,396), Msida (2,655), Gzira (2,061) and St Julians (1,960), which together account for 27% of all contracts in the country. 

Other popular localities in the Maltese rental market include Marsascala, Birkirkara, Swieqi, Mellieha, San Gwann and Mosta, all of which are host to more than 1,000 rental contracts. 

On the other hand, the least popular localities in Malta for renting are Mtarfa, Mdina and Santa Lucija, with less than twenty contracts registered in each of these localities. 

In Gozo, 22% of rental contracts are based in Żebbuġ, which includes Marsalforn, followed by Victoria (15%), Għajnsielem (11%), Xagħra (10%) and Munxar (10%). 

Overall, the distribution of rental contracts by locality is very similar to the situation prevailing at the end of 2020.

What are people renting?

Most rental properties consist of apartments, while in terms of size, around there in four properties contain two to three bedrooms.  

Around two-thirds of all long and short-term contracts in the register have a monthly rent of between €400 and €899. 

The paper says that the pandemic was a driver for the premature termination of rental agreements by tenants.  Some 19,270 of the 37,976 contracts were cut short by tenants last year.  

Around two-thirds of premature terminations occurred with a mutual agreement between the parties.

A total of 14,440  renewed contracts were registered in 2021 - 85% of these were automatically renewed.  

Around 96% of active contracts were for long-term leases with a further 4% classified as shared spaces. 

The share of short-term leases stood at only 0.5% of active contracts at the end of 2021. 

At the end of 2020, 95% of all contracts registered with the Housing Authority were of a long-term lease, with the share of short-lets and shared spaces amounting to 1% and 5%, respectively. 

How much is rent today?

Around two-thirds of contracts have a monthly rent between €400 and €899. 

The most common bracket refers to the €600-€699 range, which comprises 17% of all active contracts excluding shared spaces. 

The share of contracts exceeding €1,000 per month stands at 18%; around 5% of active contracts have a monthly rent exceeding €1,500. 

At the other end of the scale, the share of contracts with a monthly rent of less than €500, which is considered the minimum price to acquire a one-bedroom apartment in Malta, stands at 21%. 

Around 5% of active contracts have a rent of less than €300 per month. 

The paper also includes a section on affordability.

According to the paper, registered rents have recovered in the second half of 2021, with the annual growth rate averaging between 2.4% and 2.8%. 

This contrasts with the situation in the first half of the year, when rents declined, albeit marginally, over 2020. 

Price: Location, location, location

In Malta, the most expensive rents are found in the Northern Harbour region, with 30% of rents in this region exceeding €1,000 per month. 

In the remaining four regions of Malta, the share of leases exceeding €1,000 stands between 4% in the South Eastern region and 15% in the Western region. 

Most rents in Malta stand in the €300-€699 bracket, except for rents in the Northern Harbour region. 

In fact, excluding the Northern Harbour region, between 47% and 60% of contracts in Malta are concentrated in this bracket.