According to Eurostat, the Maltese real estate industry has flourished during the last two years. Local property prices have increased by 4.1% between the end of 2013 and the third quarter of 2014, placing Malta among the most desired retirement and investment destinations and in direct competition with traditional European retirement destinations like Italy, France, Spain, Portugal and Cyprus.
The same Eurostat report shows that among the most influential factors helping Malta surpass other European real estate markets, there are the schemes and incentives for foreign buyers. Among these, the Maltese Individual Investor Program and Special Designated Areas have increased the buyers interest the most. The Special Designated Areas program, the Gozo area in particular, is considered attractive due to all tax benefits it provides, but also because of the diversity of the properties. Based on the attractive market conditions, some of the best international real estate companies have been relocated to Malta.
Maltese property prices have been rising for the past 6 quarters, after a short slump in late 2012. Malta’s house price index rose by 7.58% (6.85% inflation-adjusted) during the year to Q3 2014, based on Central Bank Malta (CBM) figures. Property prices rose by 1.30% (0.46% inflation-adjusted) during the third quarter of Q3 2014.
Most property types experienced price hikes:
- Apartments had a 7.17% price increase during the year to Q3 2014. Prices actually went up by 6.44%, when adjusted to inflation.
- Terraced houses rose by 5.89% (5.18% inflation adjusted) y-o-y in Q3 2014.
- Maisonettes, on the other hand, had a slight price drop of 0.42% (1.09% inflation adjusted) y-o-y in Q3 2014.
- Other houses consisting of townhouses, houses of character and villas, experienced the highest price increase of 16.17% (15.38% inflation-adjusted) during the year to Q3 2014.
Rising house prices are partially attributable to the Individual Investor Programme. In addition, the government has introduced in 2014 the stamp duty exemption for first-time buyers on the first €150,000 of their new property’s value where the scheme has been extended till 30th June 2015 for all contracts for sale made on or before that date.