Unique foreign homeownership rules, overbuilding and a poor renters market has sucked the air out of Malta’s short residential real estate surge, and now prices of domiciles of every kind are on the decline. Apartments, maisonettes, terraced houses and the catchall category of “other houses” have all shifted downward. Malta experienced amazing price increases from 2000 to 2007, but the beginning of the global financial crisis marked the end of the boom and the country has yet to see a stabilized real estate price recovery. For more on this continue reading the following article from Global Property Guide.
The start of 2011 has been rough for some property owners in Malta:
- Apartments saw a 1% nominal price increase over the year to Q1 2011 but their prices actually fell by 1.5% when adjusted for inflation.
- Maisonettes dropped by 0.2% (-2.7% in real terms) during the year to Q1 2010.
- Terraced houses fell in value by 6.1% (-8.5% in real terms) over the year to Q1 2011.
- “Other houses”, which consisted of townhouses, houses of character and villas, experienced the largest price drop of 12.8% (-15% in real terms) over the year to Q1 2011.
In 2010, the total number of new dwelling permits rose by 20.8% to 1,499, according to the Malta Environment and Planning Authority. Yet in 2010, the economy grew by 3.65%, and in 2011 real GDP growth is expected to be 2.5%.
From 2000 to 2007, Malta’s overall house price index rose by 78.9% (53.4% in real terms). Over the same period:
- Terraced houses saw the largest price increase of 105.3% (76% in real terms)
- Apartment prices rose by 83.3% (57.1% in real terms)
- The prices of maisonettes increased by 81.4% (55.5% in real terms)
- The prices of townhouses and villas rose by 71.9% (47.4% in real terms)
There are many restrictions on property ownership in Malta. Foreign nationals and EU citizens can only buy one property in Malta, and usually only for owner-occupancy. But they can buy more properties in ‘specially designated areas’ such as Tigne Point, Portomaso, Cottoenra, Manoel Island, and Chambray.
Properties owned by foreigners can be rented out only if the property is valued over €233,000, it has a swimming pool, and it is registered with the Hotel and Catering Establishments Board. Foreign-owned properties can only be rented out for short-term lease agreements.