A survey, which is an annual one commissioned by the Malta Developers Association and carried out by KPMG, confirmed last week what was already quite apparent: that housing has become less affordable in recent years.

Indeed the survey showed that between 2015 to 2021, housing affordability dropped in all types of housing.

In 2021 a typical apartment was priced at €265,000, therefore, the average wage would be able to buy an apartment costing €201,400 – essentially meaning that anybody on an average wage would not be able to afford purchasing an average property by themselves.

The average price of a typical apartment in 2021 increased by €11,000 from 2020 when the average price sat at €254,000. A typical penthouse in 2021 was priced at €380,000 whilst in 2020 it was €354,000.

And the survey highlights that the price of property can increase further still due to the increased price of raw materials owing to Russia’s invasion of Ukraine, which is result in construction becoming more expensive, and due to increased transportation costs of these same raw materials as well.

With wages not increasing by any stretch of anyone’s imagination, this only means that housing affordability will continue to drop and that more and more people will either be forced to live in an apartment more akin to a concrete hovel or be priced out of the property market altogether.

The property market being out of reach for many attempting to get into the market is a phenomenon which has been ongoing for a number of years, and there has been little in the way of solutions in order to help housing affordability.

While the government has on one part implemented a number of schemes such as the first-time buyer scheme and other incentives for particular properties such as those in Urban Conservation Areas, it has on the other part been one of the reasons why house prices have increased (particularly to rent) due to its implementation of a minimum property cost on the golden passport scheme.

The government’s latest measure – a major electoral pledge last February – which was mentioned in last week’s Budget is a €10,000 cash grant for all first-time buyers, spread across 10 years.  Such a cash grant sounds good on paper, but one needs to see if this will simply result in developers – particularly those of the more greedy kind – raising property prices by that amount.

The impact of lack of housing affordability, particularly on the country’s youth demographic, is significant.  A lack of housing affordability can drive youths away from the country in search of better fortunes abroad, while for those who stay, the fact that they perhaps cannot move out of their family home until past the age of 30 can have a significant impact from a societal independence perspective.

The issue of housing affordability is – in fairness – one where issues are present in many cities (and we must compare Malta to a city, given its size and dense population) across the world, and it is one which is notoriously difficult to tackle.

But, solutions – even if innovative, or if adapting from other countries – are needed.