Yes, the real estate market in Malta really is booming thanks to a booming national economy, and investment by rich and powerful multinational companies! Real estate in Malta is a hot commodity as a result with many listings staying on the market for only 36 days. Housing prices, while going up dramatically because of the increased demand in relation to supply, are still in the affordable range for most Americans and Europeans. The Maltese real estate market, not surprisingly is a prime candidate for those who invest in real estate!
According to information from recent surveys and studies, Malta has the world’s fastest growing housing market for the reasons mentioned above. Average real estate prices increased by 17% in the second quarter of 2018. Investors, both domestic and foreign, are pouring their money in the Maltese real estate market as a result, investing heavily in housing for rent. In an interesting development, many Maltese are renting out and, hence, investing in their own properties as a way to increase household income, and increase their net worth. In is interesting to note that the growing number of multinationals in niche industries like back-end office operations, and gaming is motivating many foreign companies to rent out their offices instead of buying them, given the rising cost of both residential and commercial real estate in Malta.
Other factors which are fueling growth in the rental market are: young people choosing to rent their homes before buying them, the rising divorce rate which is fast leading to more single people in need of a new home, and the rise of the single parent family. The housing rental market is even more lucrative given the fact that many prime homes are available in Malta, and rates on home loans are very low – this gives more people the chance to be able to afford a new home!
Those who do choose to rent out their properties can expect an annual return on investment of between 3.5 to 6%. This may seem like a modest amount, but actually turns out to be a lot of rental income given that housing prices are rising very quickly, and that demand for new housing is growing fast. The rate of return the landlord can expect to earn depends on the market value of the property, its condition, its location, and the state of the furniture. Properties that score highly on all measures will earn more in rental income than others. This is because renters expect their homes to be well maintained, attractive, and well furnished because they are making a huge life investment.
When people think of the prime cities and countries for investing in real estate, America, England, and London come to mind. Hardly anyone would think that Malta would be a popular and hot market for rental properties, however because Malta’s economy is booming while others falter, it is only natural that its real estate market would take off as well!