The workers behind Malt

Data published earlier this week confirmed Malta’s strong economic performance. Real GDP grew by 7.5 per cent, further confirming that Malta is going through an economic boom. Last week’s analysis looked at various sectors which have contributed to such growth, most notably the service sectors. JP Fabri says that, being an island with no natural resources other than human capital and jurisdictional power, Malta’s growth has largely been influenced by the island’s ability to create and sustain ecosystems around innovative legislation establishing regulation-based economic sectors. The gaming sector is a case in point; not only has it contributed to the country’s growth, but has been a magnet for foreign workers, leading to an increased demand for properties, especially rental ones.

The human demand for property

Last week, we described a number of demand and supply factors that have been contributing to the increase in the rental prices Malta is currently experiencing. This week, we focus on the most basic demand factor: population growth. Malta’s population has been increasing at a fast pace, and when assessing whether this increase stems from natural population growth or migratory flows, it becomes clear that, in Malta’s case, migration is the sole driver of such an increase in its population. (See charts on right)

Fabri notes that Malta’s economic growth has not only lowered Malta’s unemployment rate, but has also brought increased migratory flows which have led to the expansion in the labour supply. This has led to an increase in the demand for rental properties. Migration, Fabri says, is the natural consequence of a fast-growing economy like Malta’s, which is on a convergence track to EU averages. Understanding such migratory flows and composition is also important for policy and plan-