The PwC made an announcement about its Malta Property Barometer earlier this week, providing some interesting results.

“One key trend that was observed during the fourth run is that there was a shift in demand for property sales to rentals. When compared to the previous run carried out during the same quarter of 2022, demand for property rentals increased (Q1 2023: 31%; Q1 2022: 12%) while it fell for property sales (Q1 2023: 42%; Q1 2022: 51%). The results of this edition registered the highest demand for property rentals and the lowest for property purchases out of all the barometer editions carried out to date.”

There are a number of factors that could contribute to this. The ever growing foreign worker population could be one explanation as to the increase in demand for rent. Another, could be that young people are being priced out of the market – a concern which has been highlighted in the past.

Now obviously one would need to analyse the sector over the coming months to see if this trend continues to intensify. One also needs to delve into the demographics of those who are renting. Are they young Maltese nationals, foreign nationals, middle-aged couples? It would make more sense for foreign nationals to rent if they only intend on living in Malta temporarily. But if the situation is such that young Maltese couples cannot afford to buy their own property and have no choice but to rent, well then there is some food for thought.

In June 2022, a study published by Grant Thornton and Dhalia on Malta’s property showed that between the first half of 2013 and the first half of 2022 house prices increased by 100%. This means that, on average, a property that sold for €100,000 in 2013 would have been selling at €200,000 in 2022. The increase was staggering. With the way prices are today, it is very difficult for a young people to buy a decent property without the support of their families.

PwC also made another interesting find through its recent barometer, “that different locations are initially sought after than those subject to residential property deeds. The top five most sought after localities according to our survey are Mosta, Attard, Naxxar, San Gwann and Birkirkara. However, NSO data shows that contracts are being registered mostly in Saint Paul’s Bay, Birkirkara, Ħaż-Żabbar, Mosta and Imsida. People may wish to purchase property in a certain locality but due to high prices, they end up having to settle for a cheaper location.”

Property prices in certain localities are sky high, there is no doubt about that, which could mean that localities which were not as sought after will now start to see more people looking to purchase property there.

When it comes to renting property the 2022 study had also found that rent prices rose, but it would be interesting to find out the average size of apartments today when compared to 2013. Property prices have risen, but have the quality of properties done the same? If one were to look around and see the type of apartments being built, are they better and more spacious than we had before… or is it a case of building smaller and costing more to rent or buy?

Inflation is also not helping.

We need to plan ahead. Property prices are linked to demand, population numbers and the such. Malta’s small size plays a factor. The gap in wages between the higher paying jobs and others is also a factor which could play a part in determining the price of property on the market. Many Maltese don’t go for certain jobs anymore because they don’t pay enough, but that doesn’t mean we can just do away with those jobs, as a number of them are considered essential. Yet if the foreign nationals conducting such jobs aren’t paid well, what kind of housing will they live in given current property prices?

There is no simple solution. The government cannot directly intervene in the property market… that would likely be disastrous. The government has schemes to help people with housing and purchasing property, but long-term, is it enough? We need to plan long-term and try to project where the country will be in 30 years-time, that way, perhaps some ideas can be brought up to help ensure that people are not priced out of the market.