Buying or Renting Property in Malta
Buying or renting property in Malta is becoming increasingly popular among Europeans and for good reason. Malta has been seen by many as an attractive option for emigration after retirement or simply to resettle to start afresh or to expand ones horizons.Property prices in Malta have soared in recent years, with ground value increasing steadily, though properties are still affordable for many Europeans, some of whom opt to rent a property, often at very reasonable prices.
Living in Malta has many positives in its favour; it is one of the safest countries in the world, it is one of the most idyllic locations for retirement and English is widely spoken. Another bonus is the cost of living which is reasonably low compared to other EU member states whilst the standard of living is relatively high. Malta is strategically situated in the Mediterranean, it has a stunning climate and enjoys high standards of healthcare and education.
The attractive characteristics that Malta benefits from makes the island an attractive option to consider renting property. Malta is now more easily accessible due to the fact that low-cost or no-frills airlines, are now offering cheap flights to Malta from the UK, Ireland, Italy, Spain, Scandinavia and Germany.
Malta is already an active long-term and holiday property rental market, and the recent introduction of low-cost airlines can only help make this property market stronger. To couple this, the government has committed itself to a substantial increase in budget allocation for tourism this year which has led experts to predict a bumper year for tourism on the island. This means that new audiences will be discovering Malta and today’s holidaymaker is very often tomorrow’s holiday or retirement home purchaser. All these factors make Malta an attractive location to consider for investment and have been met very enthusiastically by property investors and developers alike.
In recent years the arrival of low cost airlines to regional airports across Europe have seen property prices within a two-hour drive escalate in popularity and price, especially among British buyers for France and Spain. With the advent of these new cheap flights to Malta, there is a very good possibility that overseas demand for real estate in Malta will increase. Those who buy property in Malta will know that they can cheaply and easily afford to visit it multiple times a year and those looking for a long weekend away will also be able to fly here cheaply and rent out a holiday villa or apartment.
Many overseas buyers who have bought a holiday property in Malta for personal use, are now also in the position to earn an attractive rental income during the vacant periods. This has only been made possible recently due to the amendment of the licensing regulations which allow any property to be rented out, so long as it is up to the superior classification standard of the Malta Tourism Authority.
A holiday property owner could not only make a good income from short-term summertime letting, but can also fill his property through the winter – albeit for a lower yield. Malta also attracts many retirees during the temperate winter months, all looking for three or four month lets to escape the harsher Northern European climate. This all means that Malta has a healthy year round rental market.
Buying and/or investing in Malta Property
Property is traditionally the most popular form of investment in most countries, but this is particularly true in Malta. The Maltese love to invest in real estate and usually with great results. Malta has a very particular market which has not seen a drop in property prices for over 40 years and average appreciation is in the region of 8% per annum. When the market slows down, as it sometimes does, prices level off until the next period of growth, but they never fall! In recent years we have seen even greater rates of appreciation in certain areas of the market – of course not all types of property appreciate at the same rate, at any one point in time.
Malta has a very limited supply of property due to its small size and to zoning limitations. The property market has been evolving in a very healthy fashion for many years and the risk of new emerging markets is negligible. The bulk of the demand for property in Malta comes from local buyers, which is a very important factor to any market’s success, further boosted by a steady overseas demand. These days, more than ever, investors are appreciating that a property’s function is not limited to that of being somebody’s home! Properties are being bought in order to generate annual income through rental as well as to generate capital growth over time.
So where in Malta does one buy, and which type of property would be best suited for one’s needs? One has to monitor the market and know its potential. Whilst some want to speculate and go for short-term gains, others want to invest in something solid which can provide a guaranteed regular return and good appreciation. The latter is usually easier to guarantee as there are many well-established areas in the market where demand is constantly high both for rental and for sale. Apartments in the St Andrews, St Julian’s and Sliema areas, for example, are normally sure bets and then it is just a question of choosing the right block in the right street (demand varies from street to street!). New, high quality developments offering good facilities are becoming the norm and these are proving to be extremely popular.
When it comes to speculation and trying to buy and sell at a profit within a short time frame, specialised knowledge of the market becomes a very important factor. Whoever is giving you advice must know the market prices extremely well and be able to identify areas of potential growth. Buying into developments on plan is a common example, but still one cannot just buy blindly as pricing plays a very important role along with knowledge of demand and supply of different types and sizes of properties.