Property in Malta: Why demand is rising but prices are falling

Real estate prices depend on two parameters: the type of housing and the region. They were taken into account by the real estate market analyst Djar and the Ernst & Young consulting agency in their report on the results of 2020.

The cost by type of housing at the end of 2020 was compared with the increase in prices in the fourth quarter of 2019. Townhouses fell the most in price. The cost of maisonettes, apartments and penthouses has practically not changed over the year. But houses with terraces went up a bit.

The price per square meter when buying a home also depends on the type of property and the region in which it is located.

Malta is divided into six regions. The capital, Valletta, is in the South Harbour region and the popular resort town of Marsascala is in the South East region. Other major cities in the North Harbour region include Sliema, Birkirkara and Gzira.

The cheapest properties are on the island of Gozo. The highest price for flats is in the North Harbour region and the highest price for terraced houses is in the Northern region.

Long-term rentals are the lowest on Gozo. The most expensive options for renting are in the North and South Harbour regions. The percentage index by the city has been calculated by the Central Bank of Malta. The average cost per rental agreement in Sliema was taken as 100%.

Examples of properties in Malta

Malta, Kalkara

€300,000 — €1,900,000

Apartments in a large-scale residential project on the first coastline

71 m² — 310 m²

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Malta, Sliema

€920,000 — €1,300,000

Apartments in a new residential high-rise project near the sea

176 m² — 211 m²

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Malta, Valletta

€1,510,000 — €3,370,000

Modern apartments not far from sea in Valetta

123 m² — 281 m²

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The buyer of Maltese property also pays fees and, if necessary, a purchase permit and architect’s report. Here are the costs to be paid:

• 5% of the value of the property — stamp duty;

• 0.25‑1% of the real estate value — notary fee;

• 1% of the property value + 18% VAT on the amount of the fee — agency fee;

• €233 — purchase permit;

• about € 300 — architect’s report.

The stamp duty rate has been temporarily reduced. It will be only 1,5% of the value of the property if the transaction amount does not exceed €400,000. If the value of the property exceeds the threshold, the buyer pays 1,5% of €400,000 and 5% of the balance of the value. But in order to take advantage of the discount, you must sign a promise of sale agreement before 31 March 2021.

We talked about this in the article "Malta reduces property purchase tax".

Property in Malta is a liquid asset. The average annual increase in the value of properties before the crisis was 5‑10%, in resort areas up to 15‑20%. The average rental profitability is between 5 and 10% per annum.

Malta’s economy will start recovering from the effects of the pandemic in 2021. This is the forecast from the European Commission and international credit agencies. And when the country opens the border to tourists, prices for buying and renting a property will rise quickly.

Real estate experts Immigrant Invest recommend not to postpone buying a property in Malta until the second half of 2021. It is more profitable for investors to purchase objects now, while prices remain low and there is a discount on the payment of stamp duty.

Foreign property buyers in Malta can also become residents and citizens of the country.

A permanent residence permit in Malta is granted if several conditions are fulfilled. In the year 2021, the applicant:

• buys or rents accommodation on the island;

• pays an administrative fee and a government fee;

• makes a donation to a Maltese non-governmental organisation;

• confirms the existence of assets from €500,000.

The minimum investment amount to participate in the programme is €112,000. We talked about the updated conditions in the article How to get a residence permit in Malta in 2021.

Maltese citizenship can only be obtained by naturalisation by direct investment. The candidate first obtains a residence permit and after a year or three years is eligible to apply for citizenship. If the application is approved, the candidate invests from €690,000 in the country’s economy and becomes a Maltese citizen.

Direct investment also involves buying or renting property on the island. The minimum deal is €700,000 when buying a property and €16,000 per annum when renting.

Maltese residents travel visa-free to Schengen countries and have the right to live, work and study in the country without restrictions. And a Maltese passport gives access to all the rights of a citizen of an EU member state.

Immigrant Invest is a licensed agent of the Malta Residence and Citizenship by Direct Investment. If you wish to become a resident or citizen of a European Union member state, seek advice from the investment programme experts.