Buying a property in Valletta: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Valletta's property market is included in our pack

Considering buying a nice property in Valletta? You're not alone!

Many people are enchanted by Valletta's historic allure and dream of owning a traditional townhouse or a modern apartment there.

Would it be a profitable investment, though? Are property prices increasing in Valletta? How much does it cost? Is it better to invest in the city center or Sliema? What are the property taxes? Where are the best yields?

We know the answers.

The Investropa team has done their homework on this market. As a matter of fact, we've compiled all our findings in one pack. Get it now.

In the lines below, we'll share useful information and some practical tips.

How's the real estate market in Valletta?

Are property values increasing or decreasing? Let's check the latest data and statistics.

Property types

In Valletta, you can find a variety of properties for sale, catering to diverse preferences and budgets.

These properties typically fall into several categories, including apartments, townhouses, penthouses, and traditional houses. Apartments are a popular option, often found in modern buildings with various sizes and amenities. Townhouses offer a more historical charm, reflecting traditional Maltese architecture.

If you're looking for a luxurious option with stunning views, penthouses might be the right choice.

Lastly, some properties retain a more authentic feel, like traditional houses showcasing the city's cultural heritage.

Whether you seek a contemporary living space or a touch of history, Valletta has something to offer for every potential homeowner.

Should you buy or rent?

(If you're purchasing for personal use and not for renting)

If Valletta is your home or a place you're planning to relocate to, you may be contemplating the buy vs. rent decision in this historical city of Malta.

Obviously, it's better to buy if you are looking for an investment opportunity and want to build equity over time.

Actually, decisions become clearer with the property price-to-rent ratio in mind. It's a simple way to gauge the impact of rental earnings on covering the property's cost.

According to Numbeo, the property price-to-rent ratio in Valletta is around 25.79, which is above the world average.

This value means that, on average, it would take you 26 years of paying rents to afford buying a property in Valletta.

Housing prices in Valletta

On average, according to the last reported data from National Statistics Office (Malta), purchasing a property in Valletta would cost you around $6,900 per square meter.

Of course, prices vary. A property in Valletta might have a different price per square meter than an apartment in Sliema. We actually give you a more detailed breakdown in our pack for buying property in Valletta and in Malta.

To give you some context, it is 2.8 times less than the property prices in the center of New York.

However, housing prices in Valletta are higher (77%) than in Dubrovnik.

The most expensive neighbourhoods in Valletta are probably Floriana, Sliema, and St. Julian's, while the cheapest are likely to be Marsa, Hamrun, and Paola.

Trends

First and foremost, we have to acknowledge that Malta offers, today, a lot of stability to investors. The last Fragile State Index that has been reported for this place is 34.7.

Keep this in view when pondering the viability of buying a property in in Valletta.

Besides that, if we look at the IMF's GDP forecasts, Malta's economy is expected to soar by 15.9% in the coming 5 years, resulting in an average GDP growth rate of 3.2%.

If you intend to invest in real estate in Valletta it's a good thing because rising prosperity among individuals signals a probable upturn in housing prices.

Also, in Malta, the average GDP per capita has changed by 8.2% over the last 5 years. It's a good number.

According to this data point, property prices in Valletta might go higher in 2024 and also later on.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Malta right now.

Buying property in Valletta

It can be difficult to buy property in Valletta due to the lack of reliable and updated information, making it difficult to navigate the buying process. That's why we have created the pack to buy property in Valletta and in Malta.

Buying process

Within our pack, we have outlined the complete buying process. This includes the necessary documents, the applicable taxes, as well as information about where to locate properties, and more.

Here, we are providing you with a simpler version to assist you in better comprehending the information.

This is the step-by-step process to purchase a property in Valletta:

1. Research the Valletta property market and set a budget in euros.
2. Engage a licensed real estate agent specialized in Valletta properties.
3. View properties in Valletta's historic districts and consider their cultural significance.
4. Conduct due diligence, including checking the property's status on the Valletta Planning Authority's schedule of properties of archaeological value.
5. Make a written offer, including the "Promise of Sale" agreement, detailing price, payment terms, and conditions.
6. Negotiate terms with the seller, with assistance from your agent.
7. Appoint a notary to oversee the purchasing process and ensure all legal requirements are met.
8. Sign the "Promise of Sale" agreement and pay a deposit (usually 10% of the property's value).
9. Conduct a "Konvenju" - a final contract, at the notary's office, which includes a full title search and other necessary checks.
10. Pay the remaining balance on the property and all associated taxes.
11. Obtain an "AIP Permit" (Acquisition of Immovable Property) if you are a non-Maltese citizen.
12. Register the property with the Land Registry and the Public Registry to finalize the purchase.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Malta.

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Where to find a property

Explore these websites to find properties in Valletta:

• QLC - A commercial real estate agency in Malta, specializing in a wide range of commercial properties for rent and sale.
• Alliance - Providing reliable expert valuations and career opportunities with full training provided at Alliance Academy.
• Property Giant - Offering a diverse range of properties for sale and rent in various locations across Malta.
• Ben Estates - Specializing in luxury properties in Malta, including historical palazzos and seafront apartments.
• RE/MAX - Offering a wide selection of residential and commercial properties for sale and rent in Malta and Gozo.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Malta.

Which properties for which budget?

As mentioned before, the average price per sqm in Valletta is $6,900. A 1-bedroom property (60 sqm) would cost approximately $414,000, and a 2-bedroom (85 sqm) would cost around $587,000.

However, property prices can vary because of their qualities and where they're located.

Property prices in the top areas of Valletta are commonly at a premium. A home in the Three Cities might come to about $1,680,000, while a condo in Sliema could be priced at $730,000.

But there are less expensive options in certain locations. You may discover a property in Cospicua for $320,000 or a property in Birgu for just $260,000.

Find a more detailed breakdown in our full pack for buying property in Malta.

Risks and pitfalls

Here are the main pitfalls when buying a property in Valletta, Malta:

• Restricted foreign ownership may limit investment opportunities.
• Dealing with the intricacies of the "Promise of Sale" agreement unique to Maltese property transactions.
• Heritage restrictions and obligations for preserving historical properties.
• Risks of coastal erosion and flooding, especially in low-lying areas.
• Potential complications in obtaining permits due to stringent planning regulations.
• High demand for short-term rentals may reduce long-term rental prospects.
• Challenging negotiation process with local sellers due to cultural norms and language barriers.
• Limited availability of modern amenities in older properties, necessitating costly renovations.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Malta Property Pack

Living in Valletta

Valletta is a vibrant, cosmopolitan city with a rich cultural heritage, offering a high quality of life with plenty of opportunities for entertainment and relaxation.

Cost of living

The cost of living in Valletta is relatively low compared to other European cities. Prices for groceries, transportation, and entertainment are generally lower than the average of most major cities in Europe.

Here are some examples to better understand the cost of living in Valletta:

• Monthly rent for a charming apartment in the historic neighborhood of Birgu: €1,000-€2,000.
• A glass of local Maltese wine at a traditional wine bar: €3-€6.
• Monthly transportation pass for buses within Valletta: €26-€50.
• A plate of traditional Maltese pastizzi at a local bakery: €1-€2.
• Admission to the Upper Barrakka Gardens with stunning views of the Grand Harbour: €2-€4.
• Monthly membership at a Valletta-based fitness studio or yoga studio: €40-€80.
• Fresh seafood from the Marsaxlokk Fish Market for a week: €20-€40.
• A bottle of local Cisk Lager beer from a convenience store: €1-€2.

Neighbourhoods

Since we want to ensure information is clear and reader-friendly, we've created a summary table outlining the different neighborhoods in Valletta. For yields, prices and rents, check our property pack.

Life in Valletta

The economy of Valletta is largely supported by the services sector, which accounts for the majority of the GDP. It is also bolstered by tourism, shipbuilding, and financial services.

What expats usually like the most in Valletta is the city's rich history and culture, as well as its picturesque views of the Mediterranean Sea. They also appreciate the vibrant nightlife, with its many bars, restaurants, and pubs.

Access to healthcare in Valletta is generally good, with a range of public and private healthcare services available.

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Renting out in Valletta

This section is for you if your goal is to buy a property and rent it out to generate income.

Long-term

Tenant Profiles in Valletta

According to the data reported by Wikipedia, the home ownership rate in Malta is 82%, which is rather high.

It is probably a bit less in Valletta though.

If you decide to buy and rent out to long-term tenants, you should target young professionals, expatriates, students, and families who are looking to live in the city center. For short-term rentals, you should target tourists and business travelers who are looking for a convenient and comfortable stay.

Here is a little summary table we've made for you.

Rental yields

As of today, rental yields in Valletta are within the 3-4% range. It's low. A good rental yield generally falls within the range of 7% or more.

Rental yields in Valletta are highest for properties located in the city centre, close to the waterfront and near commercial and retail hubs. This is because such locations are highly sought-after by tenants due to their convenience and proximity to amenities.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Valletta are taxed at 35%, which is relatively high.

Short-term

You could also decide to rent short-term to tourists visiting Valletta for holiday, or business professionals visiting the city for work. Additionally, there may be students studying abroad who are looking for short-term accommodation.

If you decide to go with that option, look for properties in Strait Street, Merchants Street, and St. Ursula Street. These areas are close to the main attractions and have easy access to public transport.

There are approximately 555 active Airbnb listings in Valletta, reflecting a dynamic short-term rental market. The average daily rate stands around $124.

You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Valletta can make around $2500 per month. Also, the average occupancy rate is estimated at 83%.

Is it worth buying real estate in Valletta then?

Absolutely, buying property in Valletta is a fantastic idea if you're seeking a blend of history, culture, and potential financial gain.

Valletta's rich heritage, vibrant atmosphere, and relatively lower cost of living compared to other European cities make it an attractive prospect.

If you're planning to settle down or invest in the long term, purchasing property here makes sense. It offers stability and a sense of belonging, with the added benefit of potential property value appreciation due to Malta's strong economy. Moreover, if you're considering short-term rentals, Valletta's appeal to tourists and the relatively high occupancy rates can turn your property into a lucrative income source.

However, it's not a one-size-fits-all scenario. Valletta's property market can be challenging, especially for foreigners, given restrictions on foreign ownership and complex buying processes. Additionally, preserving historical properties in the city comes with costly obligations.

There are also environmental risks to consider, particularly in low-lying coastal areas. Language barriers and cultural norms can make negotiations tricky, and older properties may require substantial renovations. So, while Valletta offers an enticing opportunity for some, it's not without its challenges, and potential buyers must weigh the pros and cons carefully before diving into this historic real estate market.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.