Authored by the expert who managed and guided the team behind the Malta Property Pack
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What is happening in Valletta’s real estate market? Are prices on the rise or decline? Is Valletta still a prime location for international buyers? How are Malta’s government policies shaping real estate taxes and regulations in 2025?
These are the questions we hear daily from industry experts, potential buyers, and sellers, from Valletta to Sliema and beyond. You might be curious about these topics too.
We understand this because we maintain close connections with local experts and individuals like you, exploring the Maltese real estate market every day. That’s why we crafted this article: to deliver clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to reach out with your thoughts or comments, and we’ll strive to enhance this content for you.
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1) Valletta’s real estate will gain from more foreign investment thanks to favorable tax incentives
Valletta's real estate market has been experiencing a noticeable boost in foreign investment, largely due to favorable tax incentives. In 2023, foreign buyers made up about 20% of all property transactions in Malta, with a total of 16,230 transactions recorded. This shows a significant interest from international investors, many of whom are drawn by the attractive tax conditions.
One of the key factors driving this interest is Malta's low tax rate of 15% on foreign income for non-residents. This is particularly appealing to foreign retirees and investors looking to maximize their financial benefits. Additionally, the Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment Programme has attracted numerous high-net-worth individuals, further boosting the real estate market.
The government has also played a crucial role by implementing tax incentives such as capital gains tax exemptions and VAT relief for property restoration. These measures make sustainable property investments more appealing, especially to eco-friendly investors. The Residential Property Price Index in Malta increased by 7.1% in 2023, driven by demand in areas like Valletta, indicating a strong market response to these incentives.
Sources: Statista, Frank Salt Real Estate
2) Valletta's rental yields will stay stable with strong demand from expatriates and digital nomads
Valletta's rental market is expected to maintain stable yields due to the strong demand from expatriates and digital nomads. Over the past few years, Malta's digital nomad permit has seen a significant 65% increase in applications, highlighting its appeal to a global audience. This influx includes diverse nationalities, such as individuals from China, the UK, and the USA, contributing to a growing expatriate community.
The demand for short-term rentals in Valletta has been consistently high, with an impressive 84% median occupancy rate. Properties are typically booked for 307 nights a year, with an average daily rate of $125. This high occupancy and rental rate indicate a robust market for landlords and investors.
Government incentives have played a crucial role in attracting digital nomads and remote workers to Malta. The Nomad Residence Permit offers favorable conditions, drawing many new residents to areas like Sliema and St. Julian’s. Additionally, incentives for restoring historic properties in Valletta have spurred investment, further boosting property values and rental demand.
Rental prices in Valletta have surged due to high demand and limited supply, with two-bedroom apartments in nearby areas like Sliema and St. Julian’s costing over €1,100 per month. This trend is expected to continue, with property prices projected to rise by 3% to 7% annually, ensuring stable or increasing rental yields.
Sources: Attard Baldacchino, Airbtics
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Malta versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Foreign buyers from non-EU countries will increasingly target Valletta for residency through investment
Valletta is becoming increasingly popular among foreign buyers from non-EU countries, and there are several reasons for this trend. In 2023, foreign buyers made up about 20% of property transactions in Malta, showing a significant rise in non-EU investment in the real estate market. This indicates a growing interest in Malta's property sector from international investors.
Additionally, Malta's residency and citizenship programs, like the Maltese Exceptional Investor Naturalization (MEIN), have been very successful. In 2023, this program alone brought in around €1,500 million, with 2,511 non-Maltese individuals gaining citizenship. These programs are particularly appealing to non-EU investors who are looking for residency and citizenship opportunities in Europe.
Moreover, Malta's economy has been thriving, with a GDP growth rate of 5.4% in 2023. This economic growth is attracting more multinational companies and expatriates, which in turn drives demand for real estate investments. The Property Price Index in Malta also rose by 7.1% in 2023, largely due to rental demand from expatriates and non-EU nationals, especially in popular areas like Valletta.
Sources: RIF Trust, Best Citizenships, Economy Finance
4) Valletta will attract more foreign buyers for its cultural heritage and investment potential
Valletta is a top choice for foreign property buyers because of its rich cultural heritage and investment potential.
In 2023, the Property Price Index in Malta jumped by 7.1%, with Valletta seeing even sharper increases. This shows a strong demand for properties in the city, making it a hot spot for investors. Foreign buyers made up about 20% of all property transactions in Malta that year, many of whom were likely drawn to Valletta's unique mix of history and modern amenities.
The city's status as a UNESCO World Heritage Site adds to its charm, offering properties with significant historical value. Valletta's strategic location in the Mediterranean makes it even more appealing, providing easy access to various international destinations. The vibrant cultural scene, with numerous events and festivals, continues to attract tourists and potential buyers alike.
Valletta's allure is not just about its past; it's also about its present and future. The city is a lively hub with a mix of old-world charm and modern conveniences. This blend makes it a unique place to live and invest in. The local government has been investing in infrastructure and public spaces, further enhancing the city's appeal.
For those considering a property purchase, Valletta offers a unique opportunity. The combination of cultural richness, strategic location, and modern amenities makes it a compelling choice. Whether you're looking for a vacation home or a long-term investment, Valletta has something to offer.
Sources: Franksalt.com.mt, FTN News
5) New property tax policies in Valletta will impact investment choices and market dynamics
Changes in property tax policies in Valletta can shake up the real estate market.
When taxes shift, they tweak the cost of owning a home, making real estate more or less attractive. For example, lower taxes can boost property demand, driving prices up. In Valletta, this is a big deal for potential buyers.
Previously, the Maltese government rolled out tax reliefs like capital gains tax exemptions and stamp duty cuts for certain properties. These were aimed at older or vacant homes and Urban Conservation Areas, and they were effective until October 2024. A 2024 survey by PwC Malta showed that 41% of buyers were swayed by these tax breaks, up from 33% the year before. Clearly, investors are keen on tax changes.
The Property Price Index in Malta has been climbing since 2016, hinting that favorable tax policies are boosting property values. The number of Promise of Sale Agreements jumped from 11,075 in 2022 to 12,064 in 2023, showing a growing interest in the market, likely nudged by these tax policies.
Sources: PwC Malta, Malta Sotheby's Realty, Malta Institute of Taxation
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6) Valletta’s expanding expat community will drive demand for varied housing and amenities
Valletta's expatriate community is booming, reshaping the housing market and local amenities.
In 2023, Malta's population grew by 4% due to immigration, with over 42,000 newcomers. Among them, 33,000 were from non-EU countries and nearly 7,000 from the EU, underscoring the diverse expatriate influx.
The PwC Real Estate Survey 2024 highlights a trend: expatriates are eyeing high-end properties. This demand is pushing developers to create housing that meets international tastes and standards.
Valletta is also seeing a rise in international schools and cultural amenities. These changes cater to expatriate families, offering education and social opportunities that align with their needs.
International community groups and events are flourishing, providing expats with platforms to connect and integrate into local life. This social infrastructure is crucial for a vibrant expatriate community.
As Valletta adapts to its growing international population, the demand for diverse housing and amenities will continue to evolve, driven by the needs and preferences of its expatriate residents.
Sources: Malta News Agency, PwC, English Cafe Malta
7) Valletta rents will increase as the city becomes more attractive to locals and expats
Rents in Valletta are on the rise as the city becomes increasingly attractive to both locals and expatriates.
One major factor is the surge in property prices, with apartment prices jumping by 9.3% and maisonettes by 13.5% in 2023. This trend often leads to higher rental prices as property owners aim to maximize their returns. The growing demand for short-term rentals due to tourism is also playing a role. In Q3 2024, Malta welcomed 1.2 million tourists, an 18% increase from the previous year, which has driven up occupancy rates and demand for vacation properties.
Government initiatives are making Valletta more appealing. The European Investment Bank is backing major regeneration projects, transforming Valletta into a vibrant cultural and business hub. Infrastructure improvements, like the €7 million harbour development, are enhancing the city's accessibility and charm. These changes are attracting both locals and expatriates, further boosting the demand for housing.
Population growth in Valletta is another factor. With over 94.94% of the population living in urban areas, there's a strong preference for city living. This high demand, coupled with limited new housing, naturally drives up rental prices. The rise in remote work has also made Valletta an attractive spot for digital nomads, increasing the demand for housing even more.
Valletta's transformation into a desirable location is evident in its bustling streets and thriving community. The city's rich history, combined with modern amenities, offers a unique living experience. As more people flock to Valletta, the competition for rental properties intensifies, pushing prices higher.
With its strategic location and ongoing developments, Valletta is set to become a prime destination for both living and investment. The city's blend of old-world charm and new-world conveniences makes it a hotspot for those seeking a dynamic urban lifestyle.
Sources: Property Malta, Dredging Today, Fondi.eu
8) Valletta will attract more foreign buyers as it gains international recognition as a cultural hub
Valletta is becoming a hotspot for foreign property buyers thanks to its cultural allure.
In recent years, property prices in Valletta have surged due to high demand and limited availability. This trend is likely to persist as more international buyers eye this vibrant city for vacation homes or investments. The charm of Valletta lies not just in its architecture but in its lively cultural scene.
The city is a stage for numerous international events, like the Valletta Baroque Festival, which has been drawing global crowds since 2019. These events showcase Valletta's rich culture and attract visitors worldwide, enhancing its reputation as a cultural destination. Imagine owning a property where the world comes to celebrate art and music.
Valletta's cultural importance was cemented when it was named the European Capital of Culture in 2018. This recognition has put it firmly on the international map, making it even more appealing to foreign investors. The city's frequent appearances in travel guides and lists of top cultural cities further boost its profile.
For those considering a property purchase, Valletta offers more than just a home; it offers a lifestyle enriched by history and culture. The city's growing international recognition is a testament to its unique blend of old-world charm and modern vibrancy.
As Valletta continues to gain fame, the interest from foreign buyers is expected to grow, making it a prime location for investment. The city's cultural events and historical significance make it a unique place to own property.
Sources: Global Property Guide, Festivals Malta, Times of Malta
We have made this infographic to give you a quick and clear snapshot of the property market in Malta. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Valletta's property prices will slightly drop in areas with older, poorly maintained buildings
In recent years, Valletta's real estate market has shown signs of a slight price decline in areas with older, less maintained buildings. One of the main reasons is the decreasing demand for these older properties. The cost of renovating such properties in Valletta is quite high, ranging from €1,000 to €1,500 per square meter, which can deter potential buyers.
Additionally, there is a growing preference for modern amenities among buyers. People are increasingly interested in tech-smart, energy-efficient apartments and historic townhouses that offer modern comforts. This trend suggests that older, less maintained buildings might not attract as many buyers, leading to a potential price decline.
Moreover, the cost of converting older properties has been rising, making it less attractive for buyers to invest in these buildings. This increased financial burden can lead to a decrease in property prices as buyers may be discouraged from purchasing or renovating older properties.
Sources: Times of Malta, Josanne Cassar, Zrinzo
10) Valletta’s real estate market will be shaped by a rising demand for walkable neighborhoods and car-free lifestyles
Valletta's real estate market has been significantly influenced by a growing preference for walkable neighborhoods and car-free living. In recent years, the city has seen increased pedestrianization projects, transforming it into a more pedestrian-friendly environment. This change has made Valletta a more pleasant place for both residents and visitors, as they can enjoy walking around without the worry of traffic dangers.
The trend towards reducing car dependency is evident, even though specific statistics on car-free households in Valletta aren't available. Initiatives like Infrastructure Malta's "Vjal Kulħadd" scheme aim to create safer and more accessible areas, encouraging walking and cycling over car use. This shift is supported by media coverage that highlights the benefits of sustainable urban mobility and walkable neighborhoods, indicating a growing consumer preference for such living environments.
Moreover, the success of Valletta’s pedestrianization has led to increased foot traffic, boosting business and making properties in these areas more attractive to buyers. This has driven up sales and property values in pedestrian-friendly zones. The Maltese government's commitment to promoting sustainable urban mobility through initiatives like "Vjal Kulħadd" further underscores the focus on reducing car dependency and enhancing walkability.
Sources: Lovin Malta, Infrastructure Malta
11) Valletta’s luxury penthouses will draw high-net-worth individuals seeking exclusivity
Valletta's luxury penthouses are set to remain attractive to high-net-worth individuals due to several compelling reasons. First, the rising property prices in Valletta, driven by high demand and limited supply, indicate a strong market for luxury properties. This trend suggests that investing in a penthouse here is a sound financial decision.
The increasing number of luxury developments and renovations, such as the Iniala Harbour House & Residences, highlights a growing interest in luxury accommodations. This development trend is a clear signal that Valletta is becoming a hotspot for luxury living.
Moreover, reports from Malta Sotheby’s International Realty show that more than half of their clientele in 2022 were qualified foreign investors, with an average sales price over €2 million. This demonstrates a significant interest from high-net-worth individuals, further supported by a 49% increase in overall sales in 2022, with luxury properties being a major driver.
Valletta’s UNESCO World Heritage status and its rich cultural and historical significance make it an ideal location for those seeking exclusive and historic properties. The city’s historic sites and fortifications are a huge draw for tourists and investors alike.
Sources: Luxury Travel Advisor, Malta Sotheby’s International Realty
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12) Valletta’s price growth will stabilize as new developments meet market demand
Valletta's real estate market is buzzing with change as new developments and incentives reshape the landscape.
Back in 2023, there was a noticeable dip in building permits, hinting at a slowdown. But things took a turn when urban regeneration projects and government incentives kicked in, especially for restoring historic gems. These efforts, particularly in the Three Cities, have been backed by hefty investments, like those from the European Investment Bank.
This financial boost has not only nudged property prices up but also lured more investors, creating a more balanced market. With limited new housing in Valletta, rental prices have climbed, showing strong demand for what's already there.
The rise of remote work has brought digital nomads and expats flocking to Valletta, eager for tech-savvy, energy-efficient homes or historic townhouses with a modern twist. This influx has pushed property prices up, but the market is stabilizing with gradual price increases rather than sudden jumps.
Insider tip: If you're eyeing Valletta, look for properties in areas benefiting from these regeneration projects. The blend of old-world charm and modern amenities is a big draw for buyers and renters alike.
As new developments continue, the overall price growth in Valletta is expected to stabilize, balancing out the market demand. This makes it a promising time for potential buyers to explore opportunities in this vibrant city.
Sources: Malta Daily, The Malta Independent
13) Valletta will see rising demand for flexible living and co-living spaces due to an influx of digital nomads
The influx of digital nomads in Valletta is set to drive demand for flexible living spaces and co-living arrangements.
Over the past few years, Valletta has become a hotspot for digital nomads, thanks to advancements in remote work technologies and changes in visa regulations. Malta was quick to catch on, launching one of the first digital nomad visa programs in the EU. This initiative has been a hit, with more and more applications rolling in, showing that Malta is becoming a favorite among remote workers.
The Maltese government is actively promoting this visa, which allows foreign remote workers to live in Malta for up to four years. This has led to a noticeable growth in co-living spaces and flexible workspace offerings in Valletta. These spaces are tailored for digital nomads, offering amenities like coworking areas, high-speed internet, and social events to help them connect and thrive.
Real estate market reports highlight an increased demand for short-term rentals, reflecting the growing number of digital nomads seeking flexible accommodation options. This trend is reshaping the local property market, with more properties being adapted to meet the needs of this new wave of residents. Valletta's real estate is evolving to cater to this dynamic group, offering more versatile living arrangements.
For those considering buying property in Valletta, it's worth noting that the city is becoming a vibrant hub for remote workers. The demand for flexible living spaces is not just a passing trend; it's a shift in how people live and work. Investing in properties that cater to digital nomads could be a smart move, given the steady influx of these tech-savvy professionals.
As Valletta continues to attract digital nomads, the city is likely to see further development in co-living and flexible workspaces. This is not just about providing a place to stay; it's about creating a community where digital nomads can connect and collaborate. The future of Valletta's property market looks promising, with opportunities for growth and innovation in living spaces.
Sources: Immigrant Invest, Coliving.com, Globexs
14) Valletta will see rising demand for rentals, boosting investor yields
The demand for rental properties in Valletta is on the rise due to several compelling reasons.
In 2023, Malta welcomed a record-breaking 3 million tourists, an 8.3% increase from 2019, with Valletta as a top destination. This influx means a strong appetite for short-term rentals, which can also enhance long-term rental yields.
The trend of remote work is drawing digital nomads and expatriates to Valletta, allured by its Mediterranean charm. This new wave of residents is likely to boost the demand for rental homes in the city.
Government incentives for restoring Valletta's historic properties are enticing real estate investors, potentially increasing the rental market's offerings. Valletta's limited new housing developments naturally push up rental prices and yields.
The scarcity of new housing makes properties in Valletta more desirable, leading to higher rental yields. Valletta's rich history and cultural attractions make it a magnet for long-term visitors, further driving rental demand.
Sources: Independent Malta, Times of Malta
We made this infographic to show you how property prices in Malta compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Valletta will see rising demand for accessible, senior-friendly housing due to its aging population
In December 2023, 18.60% of Malta's population was aged 65 and over, and this number has been steadily climbing. This means there are more elderly people now than before, which naturally leads to a higher demand for housing that suits their needs.
Internationally, older adults have shown a preference for homes that are both accessible and senior-friendly. This trend is expected to influence Malta's real estate market, pushing for more tech-enhanced and sustainable living options. Real estate analysis in Malta has already shown a shift towards age-friendly developments, with demand often outstripping supply, indicating that properties with accessibility features are highly sought after.
Government reports have highlighted the pressing need for adaptable housing and infrastructure in Malta due to the growing elderly population. This is part of a broader international movement towards better housing for older adults. Additionally, the intergenerational housing programme launched in Valletta in 2021 serves as a successful example of senior housing development, addressing loneliness among the elderly and providing a community setting.
Sources: Trading Economics, NIC MAP Vision, The Independent
16) Valletta will see rental yields drop in some areas due to an oversupply of short-term rentals
In recent years, Valletta has seen a significant rise in the number of short-term rental listings on platforms like Airbnb. This increase has led to an oversupply in the market, which can reduce rental yields as there are more properties available than there is demand for them. For example, reports have shown that the number of short-term rental listings grew by 20% in the past year, surpassing the demand for long-term rentals.
Additionally, there has been a substantial increase in construction permits for new residential developments in Valletta. This surge in new supply contributes to the oversupply of rental properties, including short-term rentals. As more properties become available, the competition among property owners intensifies, which can drive down rental yields.
Real estate agencies have reported that the short-term rental market in Valletta is becoming saturated, leading to decreased occupancy rates and lower rental yields. For instance, the average occupancy rate for short-term rentals in Valletta dropped from 80% to 60% over the past year, indicating a less competitive market for these rentals.
Sources: Times of Malta, Virginia Beach Planning
17) Valletta’s rental yields will rise as long-term tenants seek cultural and historical experiences
Valletta's rental yields are poised to increase as the city becomes more attractive to long-term tenants seeking cultural and historical experiences. In 2023, Malta celebrated a record-breaking tourism year, with over 3 million tourists visiting, surpassing pre-pandemic levels. This surge in tourism highlights Valletta's growing appeal as a cultural destination.
Valletta's status as a UNESCO World Heritage site and its vibrant cultural scene, including historical sites and museums, continue to draw interest from around the world. The upcoming opening of the Malta International Contemporary Art Space (MICAS) in 2024 will further enhance the city's cultural offerings, attracting more long-term tenants who value cultural experiences.
Property prices in Valletta are expected to rise in 2025 due to high demand and limited supply, indicating the city's increasing attractiveness to investors. This trend suggests that rental yields will likely increase as more people seek to live in Valletta, driven by its cultural and historical significance.
Sources: FTN News, Book Cottages
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.