Growth in rental rates this year was slower in 2019 than in the previous year, although it remained elevated from a historical perspective, according to research carried out by economists at the Central Bank of Malta.

COVID-19 also led the annual growth of rental rates to turn negative during the first quarter of 2020, where advertised rental rates were between 3% and 3.5% lower than they had been during the corresponding quarter of 2019.

A more pronounced drop in rental rates was observed in the second quarter of 2020, with rental rates decreasing by 11%. Malta registered its first known case of the virus on March 7

This period started to reflect more fully the impact of containment measures worldwide, including Malta, to address the spread of the COVID-19 virus, with the drop in rates driven by a combination of reduced demand for and increased supply of rental units on the market.


The bank’s annual Research Bulletin includes a detailed article explaining the development of a quality-adjusted residential real estate rent index, as well as an article concerning the linkages between house prices, inflows of foreign workers and domestic consumption.

It also has a comparison of the results of Malta’s Household Finance and Consumption Survey with those of Euro Area Member States and other participating EU countries, and an extension of one of the macroeconometric models used by the bank, known as STREAM.

Almost 22,000 listings analysed

The bank said that its "innovative approach" to analysing the residential real estate rental market rests on the use of ‘Big Data’ from publicly available sources so as to get a better understanding of the evolution of private-sector rents after taking into account quality adjustments.

The database now comprises 21,883 listings of advertised rental rates, and takes into account details concerning the type of property, location, size and other attributes that may have an impact on rental rates. 

“Until the last quarter of 2018, the database consisted of solely two housing types – apartments and maisonettes – along with information about the locality in which the property is located and the number of bedrooms. 

“As part of a continuous effort to enrich this database, starting in the first quarter of 2019, this information was supplemented by the collection of data about penthouses, additional localities that were previously not incorporated and other observable property characteristics. 

“In particular, we started to collect information on attributes such as the availability of a garage, garden or pool facilities and instances where a property is advertised as being on or close to a seafront or enjoying some view,” the authors of the article said.

This approach can be used both for estimation of over/under-valuation of rental rates and to construct the growth rates of quality-adjusted private sector rental rates over time. 

Some of the findings

• Penthouses generally attract a premium of between 23% and 27% when compared to apartments. 

• Most of the properties advertised for rent are two-bedroom (40%) and three-bedroom (46%) properties. Around 12% of listings have only one bedroom, while a very limited number of properties (just under 2%) come with four or more bedrooms.

• Rental rates for two- and three-bedroom units stand at around 35% and 65% higher than the benchmark one-bedroom unit. 

• The number of properties advertised as having a garage, garden or pool amounted to 3%, 1%, and 2%, respectively. 

• A property close to a seafront commands a 15% premium, while the availability of a garage carries a premium of 13%.

Independent journalism costs money. Support Times of Malta for the price of a coffee.

Support Us