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Everything you need to know is included in our Malta Property Pack
Are you thinking of investing in property in Malta? Are you wondering whether you should make a purchase now or in the future?
Market timing is a topic that people have different thoughts on. Your Maltese colleague might suggest that now is a perfect time to invest in property, whereas your spouse, who is originally from Valletta, might have a different view and recommend waiting for more stability.
At Investropa, when we create articles or update our pack of documents related to the real estate market in Malta, we trust facts and data, not opinions or rumors.
After thoroughly analyzing official reports and statistics available on government websites, we have gathered solid information in a database. Here are our findings that can assist you in determining whether it's the right time to invest in real estate in Malta.
Dive in and enjoy!
How is the property market in Malta these days?
Malta offers, today, a lot of stability to investors
Positive
Stability is the first indicator to look at because it ensures a supportive economic and social framework, enhancing the viability of real estate assets. It is an information you need as a foreigner who might buy a property in Malta.
You probably know it already, Malta is very stable. The last Fragile State Index reported for this country is 31.1, which is an outstanding number.
Malta offers stability to investors due to its robust regulatory framework, particularly in financial services and blockchain technology, which is supported by EU membership and adherence to EU regulations. Additionally, its strategic location in the Mediterranean, coupled with a strong economy characterized by consistent GDP growth and low unemployment rates, enhances its appeal as a stable investment destination.
Next, let's assess the economic projections.
Malta will see substantial development
Positive
Before investing in properties, check if the country's economy is strong enough.
According to the IMF, Malta will, in 2024, grow by 5%, which confirms the country's quick development. As for 2025, the figure we're looking at is 4%.
The growth will continue to be there for more years to come since Malta's economy is expected to increase by 18.2% during the next 5 years, resulting in an average GDP growth rate of 3.6%.
The expected sustainable growth rate in Malta indicates a stable and healthy economy, which can lead to increased property values over time, making real estate a potentially profitable investment. Additionally, a growing economy often attracts more residents and businesses, boosting demand for housing and rental properties.
Now, let's delve into other metrics worth exploring.
Maltese business owners used to be really confident, now it's the contrary
Negative
What is the general perception of Maltese citizens about their economy? The GDP forecast lacks a comprehensive perspective. Thankfully, in Malta there is an official metric that is frequently communicated. It's not the case for every country, so we're lucky.
The Business Consumer Index (BCI) is the name given to this metric, which relies on surveys and assessments of business leaders to gauge their confidence in the present and future economic conditions.
The Global Economy reports that the Business Confidence Index has reached a value of -15 for Malta. It's a score that can be regarded as "worrisomee.
A year ago, things were really different. Business operators were super confident and the score climbed to 29.
The current negative business confidence score in Malta alone isn't sufficient to determine the timing for property investment. We need to consider additional data.
Malta's property market experiences steady and reliable growth
Positive
Malta's home prices have increased by 26.3% in 5 years according to eurostat.
It means that if you had bought a townhouse in Valletta for $625,000 five years ago, then it would now be worth around $789,000.
Recently, the property market in Malta has been characterized by reasonable and consistent growth. Property values have shown a steady increase, and the market has maintained a reliable level of activity.
It's a good sign when you see consistent and reliable growth. If you're thinking of buying a property in Malta, and if this trend continues, there's a possibility that your investment could increase in value over time.
You can find a more detailed analysis of the real estate prices in our property pack for Malta.
Everything you need to know is included in our Malta Property Pack
Malta's population is growing and getting richer
Positive
Population growth and GDP per capita should be on your mind when you're in the market for real estate because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Malta, the average GDP per capita has changed by 8.2% over the last 5 years. It's a good number. Furthermore, the Maltese population is growing (+12% in 5 years).
This means that, if you purchase a charming townhouse in Valletta and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, the demand for rentals is expected to increase in Maltese cities such as Valletta or Sliema in 2025.
You'll get good rental yields in Malta
Positive
Moving forward, let's examine the rental yield.
It's the annual rental income of a property divided by its price. For example, if a Maltese property is purchased for €300,000 and generates €15,000 in annual rental income, the rental yield would be 5%.
According to Numbeo, rental properties in Malta offer gross rental yields ranging from 4.0% and 6.7%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Malta.
It's a good number.
Everything you need to know is included in our Malta Property Pack
In Malta, inflation is projected to remain minimal
Neutral
In two words, inflation is when currency weakens.
It's when your regular bus ticket in Valletta costs 2 euros instead of 1.50 euros a couple of years ago.
If you're planning to invest in a property, high inflation can offer several benefits:
- Property values often increase over time, leading to potential capital appreciation.
- Inflation can lead to higher rental rates, thereby increasing the cash flow from the property.
- Inflation decreases the real value of debt, making mortgage payments more affordable.
- Real estate can serve as a hedge against inflation, safeguarding the value of the investment.
- Diversifying into real estate provides stability during periods of inflation.
Based on the IMF's outlook, over the next 5 years, Malta will have an inflation rate of 1.0%, which gives us an average yearly increase of 0.2%.
This data infers that Malta is expected to have near-zero inflation then. Unfortunately, buying a property now may not lead to significant price increases or high profits in the future.
Is it a good time to buy real estate in Malta then?
Now it's time to draw our conclusions.
Malta is a fantastic place to consider buying property in 2025, especially if you're looking for stability in your investments. The country has been a beacon of stability for investors, offering a secure environment to put your money into. With Malta's economy expected to grow by 18.2% over the next five years, this translates to an average GDP growth rate of 3.6%. Such economic growth is a strong indicator that the country is on a positive trajectory, making it an attractive option for property investment.
One of the key reasons to invest in Malta's real estate is the expected sustainable growth rate, which points to a stable and healthy economy. This kind of economic environment often leads to increased property values over time, making real estate a potentially profitable investment. As the economy grows, it tends to attract more residents and businesses, which in turn boosts the demand for housing and rental properties. This demand can drive up property prices, offering a good return on investment for property buyers.
Malta's property market is known for its steady and reliable growth, which is reassuring for anyone looking to invest in real estate. The population in Malta is not only growing but also becoming wealthier, which means there is a rising demand for quality housing. This demographic trend supports the property market's growth, ensuring that your investment is likely to appreciate over time. Moreover, with rental properties offering gross rental yields ranging from 4.0% to 6.7%, according to Numbeo, there are opportunities for generating income through rentals as well.
Another factor that makes 2025 a good time to buy property in Malta is the country's low inflation rate. Minimal inflation means that the purchasing power of your money is preserved, and the cost of living remains stable. This economic stability is crucial for maintaining the value of your property investment over time. With all these factors combined, Malta presents a compelling case for property investment, offering both stability and growth potential in the coming years.
We hope this article has offered you practical support!. If you need to know more, you can check our our pack of documents related to the real estate market in Malta.
-Will real estate prices go up in Malta?
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.