Rent yields shot up significantly last year in Sliema, St Julian’s and Valletta when compared to the year before, a recent report from Djar and EY reveals.

The increases have been attributed to a return of tenants following recovery from the COVID-19 pandemic as well as a higher demand for properties located in those areas.

A property’s rental yield is calculated by dividing the annual rental income by the value of the property.

Yields for two-bedroom apartments in the three localities rose by an average of 3.64 percentage points, with Valletta showing the largest increase.

When comparing the overall picture for 2022 against the third quarter of 2021, yields for two-bedroom apartments in Sliema, St Julian’s and Valletta rose by 3.25 percentage points, 3.01 and 4.66 respectively.

Last year, the average rental yield for a two-bedroom apartment in Sliema was estimated to be 7.36 per cent, with St Julian’s showing a similar figure of 7.64 per cent. Valletta was the highest nationally in this category, with an estimated rental yield of 8.18 per cent. 

Rent yields across the islands.

The report suggests the higher yields may be attributable to an increased demand for apartments in these regions as well as a return of tourists following tourism’s recovery from the impacts of COVID-19.

The impacts of the pandemic were keenly felt during the first eight months of 2021, with only 426,930 tourists visiting the country, a decrease of 20 per cent on the same period the year before. From March 21 to the end of May, all flights into Malta were suspended, with the airport only being reopened on July 1.

In 2022, however, the sector showed considerable recovery, with tourist numbers during the first eight months of the year rising to 1,474,365 – more than three times the numbers seen in 2021.

The lowest yields in rent last year were recorded in Gozo, with yields for two-bedroom apartments the lowest in the country in Marsalforn and Nadur at 3.55 per cent.

Victoria fared better at 3.82 per cent, though this was still lower than any yield in Malta, according to the localities listed in the report.

This picture for Gozo contrasts starkly with 2021, when a similar report by the same authors for the third quarter of that year showed rent yields of 7 and 4.73 per cent for Victoria and Nadur respectively.

This reflected a trend for increased domestic tourism in 2021 as recorded by the National Statistics Office (NSO), which, in July last year, published data showing domestic tourism expenditure in Gozo and Comino increased by a third to almost €76.6 million.

The number of domestic tourists to Gozo rose significantly during the pandemic, with 348,489 visiting in 2020, climbing to 365,252 in 2021. These numbers stand in stark contrast to the 215,272 seen in 2019, according to the NSO.