Close to southern Italy and northern Africa, but with a sophisticated European property scene that is a magnet for top designers and architects, Malta scored highly in the recent International Quality of Life Index, with freedom and security , the climate and the environment all awarded. between 85 and 100 percent. Although restrictions are placed on the number of properties that foreigners can buy in Malta, there are opportunities to buy and rent multiple properties in special investment areas – Specially Designated Areas (SDA). Strict regulations govern the conditions of purchase and rental in residential areas outside the SDAs.
Mark Bodega, Director of HiFX.com, the UK’s leading independent online foreign exchange brokers, explains why he thinks there are still reasons to be cautious. He said: “It was apartments that caused house prices to fall. Malta’s explosive EU housing boom in 2003 and 2004 saw huge increases in house prices and sharp increases in construction activity But with declining demand and excess supply, the housing boom is now officially over.”
However, with such a small land mass, the future for house prices looks promising. Even if the pace of capital appreciation has slowed, developers cannot simply continue to retreat inland as they have in Spain.
Jeffrey Buttigieg, Regional Director of Re/Max Malta, comments: “High end project developers such as Portomaso and Tigne Point have seen encouraging results throughout 2009 and look forward to a prosperous 2010. It is the project developers who are struggling. smaller, budget properties, although first-time buyers who previously struggled to purchase a property are benefiting from lower property prices and low interest rates.”
For those looking to invest in a vacation home or rental property, he recommends that the search for a property focus on an area where resales are easy to come by, in one of the specially designated areas such as those mentioned above and also in Ta Sellum. , Fort Chambray in Gozo and Pender Gardens.
The rental market in Malta is efficiently based around the trendy area of St Julian’s and Sliema, with a good selection of waterfront and inland apartments nearby. This is the main center of employment and entertainment on the island. “If you’re looking for a luxury villa, you can broaden your search to Madiena and Ibrag,” says Jeffrey, “but certainly the number of buyers venturing into niche markets such as 300-year-old country houses has decreased and been removed.” Those in search of the true peace and quiet that a more remote property offers are likely to turn to the island of Gozo.
But for most foreign buyers, lured by the tax advantages of buying from an SDA, the Tigne Point development, just 15 minutes from the international airport, is worth considering. Tigne Point is also just a short boat ride across the harbor from the island’s beautiful Baroque capital, Valletta, a World Heritage Site.
Vanessa Lupi, from the marketing department at Frank Salt Real Estate in Malta, says: “Although the island has never attracted hordes of buyers, recent years have seen steady growth in the local market. Those who have invested here in the past have seen a significant return on their investment.
Vanessa continues: “Another contribution to property demand was the introduction of low cost flights to and from Malta, which made it easier for people to visit. The number of people buying for investment purposes is now relatively high, mainly due to to a healthy rental yield of four to five percent, as well as capital appreciation that adds to the value of the property.
Malta has a lot to offer UK expats. Traditionally, the competition might have been Spain, Portugal, Turkey, Cyprus, Greece, and the South of France, in terms of weather and accessibility, but being a small island, travel and distance between locations is easy. “Everywhere is a couple of minutes’ drive from one place to another,” says Vanessa, and although Malta shares a beautiful year-round climate, sun and sea with these other destinations, local agents agree that Malta has a number of unique selling points for British Buyers including: driving on the left, most Maltese locals are fluent in English, excellent national and private medical and hospital services and a reciprocal health agreement between the UK and Malt. The islanders also boast of being friendly and hospitable people, and that integration with the local communities is very easy. The island has low taxes, no fees or council taxes, a low cost of living, excellent education in English-speaking schools and the University, and daily flights to major European and North African airports. The expansion of budget flight routes has also created price competition, which has a ripple effect for expats, visiting families and tourists.
Perhaps it is Malta’s long-standing tradition of buying property rather than renting that, according to Jeffrey Buttigieg, may have contributed to rising property prices over the years and continued to keep the industry strong. He says: “Our buying procedure is simple and straightforward, plus it protects both seller and buyer. There is no ‘gazumping’, ‘gazundering’ or auctions in Malta.”
In the coming years, as land becomes more expensive, properties in Malta may become smaller and more open, to create more space. More condominiums may prove popular with developers and new builds in SDA are anticipated to attract a growing number of British, German, South African and Northern European buyers. Retirees and families will continue to be interested in character properties, of course, but agents anticipate growing interest from investors, drawn by the luxury of life and the limits to over-expansion that Malta offers.