Befriend the Trend:
residential property is still an attractive option for South Africans. Mauritius and the Seychelles remain firm favourites – given that the investment comes with residency qualification – but following the recent introduction of a global residency programme in Malta, the country and its surrounding islands are emerging as hot spots, offering several additional benefits for investors.
The first week of July saw the advent of the Malta Global Residency Programme, which offers incentives for foreign nationals looking for an EU residence permit. But lifestyle advantages, tax-friendly regulations and dual residency aside, tapping into the country’s property market presents a prosperous opportunity for capital growth and rental earnings.
Joseph Theuma, general manager of RE/MAX Malta, says that the property market in Malta has seen a strong track record of near constant capital appreciation.
“The demand remains consistent and underpinning market prices is demand from locals,” he says. “This means that the market runs little risk of any volatility brought about by sudden disenchantment from expats living in the country.”
Silema and St Julians are the most sought after areas – located on the most prominent sea fronts. Theuma says: “Madilena is arguably the best location the island can offer for luxury properties.” The sister island of Gozo, he says, is the best-guarded secret of the Maltese themselves, a large number of whom own a property there as a second home.
In order to be granted residency, applicants must either purchase a property or be party to a rental agreement. Both options are subject to a minimum expenditure parameter. In the case of a rental, the price is fixed at R131 261 per annum for properties located in Malta and R119 639 for those located in Gozo and the south of Malta. For purchases, the price floor is set at R3.7m in Malta and R3m in Gozo and the south.
To tap into the Maltese rental market, foreign investors must purchase a property in a special designated area. These types of developments exist around the islands and are typically upmarket, if not luxurious properties. Theuma says that landlords can expect a rental return of between 4% and 6.5%.
“However, the main cause of attraction for investing in Maltese property would be capital appreciation. If one put aside the slight easing in 2010/11, the prices of our properties have always experienced an upward shift with increases ranging from 3% to 4% during slowdowns, to highs of 10% and over.”
Once residency is granted, foreign nationals must spend at least six months of the year in Malta. For individuals travelling to and from the EU regularly, dual-residency is a major draw card, eliminating the process of applying for a Schengen visa each time.
From a lifestyle point of view, Malta affords a crime-free environment, pleasant climate and a wealth of history and culture packaged within the Maltese archipelago.
The country’s track record puts property investment as one of the most solid and assured means of investment. Malta and Gozo now boast a sizeable community of SA expats, some of which have fully integrated themselves into Maltese society and Mediterranean life.