14 January 2008
The Future of the Maltese Property Market
For decades, the Maltese Real Estate market has continued to be a positive investment. Although property prices are certainly not a steal, the Real Estate market is considered to be stable. The economy of Malta is intrinsically linked to its tourist industry and property market, all of which have faced and dealt with recent challenges.
But is the Maltese property market ready for the challenges and changes ahead and can it sustain its residential property market?
To answer these questions, let us take a brief look at the current situation, potential future issues and solutions being taken to attain a sustainable property based economy.
Over the past 20 years, Maltese property prices have risen six-fold with the sharpest increase in prices occurring over the latter half. Malta is no longer considered as an affordable market for those seeking second or holiday homes; this group has turned its interest to North African or Baltic countries. Instead, Malta now looks to those seeking permanent retirement homes abroad and luxury, state-of-the-art apartments .To attract these professionals, Malta needs to develop complimentary industries to the staples of tourism and real estate.
In the past, construction has been concentrated on residential developments with scant regard for commercial premises, thus impairing its ability to attract businesses. But this is changing. The Government along with private entrepreneurs has recognised the challenge and has identified economy-diversifying measures and initiated the development of an infrastructure that will support the new incoming industries.
In particular, online gaming, near-shoring information technology companies and international financial institutions are being tempted to Malta by favourable taxation rates, an educated English speaking workforce, good standards of living and healthcare and most importantly a new comprehensive infrastructure. For example, the creation of SmartCity; a global ICT and media business services hub, is on track to provide the environment for sustainable foreign direct investment resulting in the increase of Malta’s purchasing power.
The development and infrastructure of these new industries will directly cause a positive effect on the residential property market and so in answer to the questions posed above; yes, the property market in Malta can meet and benefit from the challenges ahead to not only sustain its residential property market but also significantly improve its commercial property market.
