The general asking price level of properties jumped around 25 per cent in one year, a study by KPMG has shown.
The study, published on Friday, revealed the estimated overall growth in price level of properties increased between 20 and 25 per cent during the period 2016-2017.
The findings were part of a study commissioned by the Malta Developers Association and were an update to the Construction Industry and Property Market report first published in October 2017.
In all, the construction and real estate sectors contributed around 13.5 per cent of the country’s gross value added in 2017. The construction sector was the biggest economic multiplier.
Contractors were more environmentally conscious, but the market often did not prioritise this particular sector, they lamented. They also noted it was a challenge to find both skilled and unskilled workers.
No property bubble but concerns of market overheating
The property market had become more dependent on financial services and gaming, making Malta’s economic attractiveness crucial, KPMG advisor David Pace said during the presentation of the results.
While there was no property bubble, there were still concerns about possible market overheating, Mr Pace noted.
Yesterday, Malta Developers Association Sandro Chetcuti noted the construction industry was not the only reason for economic growth, which was diversified enough to be affected by multiple sectors. Everything indicates that employment is increasing to this day, he said.
While there were concerns of oversupply, making the market unsustainable, the industry could remain on the right track if it moved carefully, he added.
Prime Minister Joseph Muscat welcomed the findings, saying that the study dismissed concerns of a housing bubble.
The market, however, would need to regulate itself and the issue was not whether they made a quick buck or not, but rather about ensuring “stakeholders did not spit in the same well they drink from”.
There was no pumping the brakes on the economy, he warned, adding that what it needed was to remain diversified.
That way, he noted, when one sector received a setback, other sectors in the country could make up for it.
“The only way forward is growth,” Dr Muscat contended.
“We cannot be satisfied with what we have. That is a fallacy and a fairy tale.”
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