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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 34.7, which is an outstanding number.
Malta is a politically and economically stable country with a highly developed infrastructure and a well-regulated financial system, making it an attractive destination for investors looking for a safe and secure place to invest their money. Additionally, Malta has a strong legal framework which provides a high degree of protection for investors and their investments.
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 2023, grow by 3.5%, which reflects the country's forward momentum. As for 2024, the figure we're looking at is 3.5%.
Besides that, the economy will keep growing since Malta's economy is expected to increase by 15.9% during the next 5 years, resulting in an average GDP growth rate of 3.2%.
The expected sustainable growth rate in Malta is a positive sign for potential investors in real estate, as it indicates that the market is likely to remain stable and continue to grow over time. This makes it a secure and attractive option for real estate investors looking for a long-term investment.
Now, let's delve into other metrics worth exploring.
Maltese business owners have faith in the economy's growth prospects
Positive
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 9 for Malta. This is a neutral score
Things haven't changed much, as the BCI score was, 12 months ago, at 6.
The current business confidence score in Malta alone isn't sufficient to determine property investment timing. We need to look at more 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 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.
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 2024.
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 expected to be moderate
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 12.9%, which gives us an average yearly increase of 2.6%.
This data infers that Malta may face inflation in the near future. In such a situation, buying property now becomes an option to consider.
Is it a good time to buy real estate in Malta then?
Now it's time to draw our conclusions.
Without a doubt, 2024 stands as an exceptional opportunity for property investment in Malta, driven by a multitude of compelling indicators. The island nation's remarkable stability provides a secure and attractive environment for investors, fostering confidence in the real estate market.
Malta's anticipated substantial development aligns with its growth prospects, making it a favorable time for property investment. As business owners in Malta express faith in the economy's growth, this positive sentiment could contribute to a vibrant investment landscape and heightened investor confidence.
The steady and reliable growth in Malta's property market is a key driver for prospective buyers. This upward trend indicates potential for sustained property value appreciation, offering investors the prospect of capital gains over time.
Alongside these strong signals, Malta's population's increasing affluence and the appeal of good rental yields further bolster the case for property investment. With the added benefit of moderate inflation expectations, the combined effect of these factors solidifies 2024 as an excellent time to consider property investment in Malta.
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.
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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.
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