Steep rise in house prices

HOUSE prices in Malta are still rising, with a sharp increase of 10.83 per cent (9.51 per cent inflation-adjusted) during the year to first quarter 2019, according to the Central Bank of Malta (CBM).

Property prices rose by 4.72 per cent (6.56 per cent inflation-adjusted) during the latest quarter.

House price increases were felt across all property types:

Apartment prices rose by 11.02 per cent on average during the year to Q1 (first quarter) 2019. When adjusted for inflation, prices were up by 9.7 per cent.

Terrace house prices rose by 15.34 per cent (13.96 per cent inflationadjusted).

Maisonettes prices rose by 7.82 per cent year on year (6.54 per cent inflation-adjusted).

“Other houses”, consisting of townhouses, houses of character and villas, experienced the highest price surge of around 15.96 per cent year on year (14.58 per cent inflation-adjusted) during the year to Q1 2019.

Malta’s buoyant house price rises over the past five years have been supported by a number of factors (according to the CBM’s 2018 annual report — Malta’s fast growing economy, which enjoyed an average growth of 9.6 per cent in 2014 and 2015, followed by 6.3 per cent from 2016 to 2018. Plus: • low interest rate environment • buoyant disposable income and • the rising number of foreign workers in the country

Prices were also boosted by government measures including the exemption of first-time property buyers from a 3.5 per cent stamp duty on the first €150,000 ($F359,683) of a new property’s value.

In 2018, another scheme was introduced, making second-time buyers eligible for a stamp duty refund of up to €3000 ($F7189) if they plan to replace their current residential homes.

Second-time buyers are not eligible if they own any other property, or are upgrading to a luxury villa.

Homeowners with disabilities can avail a higher stamp duty refund of up to €5000 ($F11981).