The real estate market has continued to experience growth throughout the second quarter of 2014 and to-date we have seen the rate of property sales increase steadily, whereas prices have also increased during this same period.
Using a systematic internal database audit on property prices in Malta and Gozo, the median price increase when comparing property prices registered on our database on the 31 March 2014 to those on our database as at 30 June 2014, was 1.91%. The highest increase in property prices was registered from terraced houses, where prices of this type of property increased by 6.79% across the board. Other property types that saw a significant price increase however within a specific geographical area were those maisonettes and apartments situated in the Sliema & surrounding areas. These type of properties registered an increase of 6.75% and 5.85% respectively during the second quarter. Prices of apartments and maisonettes situated in the Central, Northern and Southern parts of Malta as well as those properties with the same property types located in Gozo, remained stabilised with an overall average increase of circa 1%. The rate of increase of property prices of penthouses across the board was that of a median of 1.33%.
Considering that apartments, penthouses and maisonettes account for circa 70% of the stock of property in Malta & Gozo and this audit was carried out over a period of three months between March 31st and 30th June, the average increase in property prices is encouraging and shows the right signs of a healthy real estate market.
During 2014, we have seen a an abnormal increase of property sales that have predominately originated from first time buyers, high net worth individuals as well as applicants of the Global residence Programme and IIP Schemes. Recent media reports have confirmed that the above segments have given the market a good boost. Speaking to a spokesperson from Identity Malta they confirmed “Identity Malta has received over 200 residency applications from individuals interested in the Individual Investor Programme. As already pointed out in the media, there are more than 30 nationalities represented in the applications. Their investment interests range over a number of sectors, including the real estate market.”
“Applicants for the IIP are required to acquire or lease a property in Malta and hold it for a minimum of five years. A number of applicants originally intended to rent property in Malta, however they become interested in buying property soon afterwards.”
“The Prime Minister has commented that IIP applicants are actually falling in love with Malta. This is due to a number of attractive factors, not least the real estate opportunities the country can offer.” According to media reports the 200 applicants may very well inject into the Economy over € 300 m worth of direct foreign Investment which is encouraging. On the other hand, the First Time Buyer Scheme has made a significant impact on the real estate market. According to sources there has also been an increase of 20% in sales of properties with a price range between €80, 000 and € 180, 000.
The rental market also remains a strong arm of the RE/MAX group and amidst reports of a scarcity of property for rent, over the last four months we have managed to supersede our targets. This shortage is by no means a coincidence, but is the result of an influx of companies and individuals relocating to Malta. Another sign of a healthy real estate market. We ask potential rental investors to contact us so that we will provide them with ideal buy to let options. Furthermore we recommend to Government to reduce income tax on rental income to 15% so that it will incentivise more individuals to invest in properties for rental purposes.
Given such astounding results, more than ever before this is a good time to purchase property. So do come and talk to us, we can help you to take an informed decision based of statistical information.