Thanks to the strength and resilience of Malta’s property market, more and more people are waking up to the fact that property is a truly attainable and lucrative investment opportunity.
While most property markets around the world experience ups and downs, the local market has, for the most part, continued to boom over the last 20 years or so. In fact, according to official numbers issued by Eurostat, property prices in Malta rose by 41.6% between 2010 and 2020, a number that is significantly steeper than the EU average.
Not only that, but real estate experts continue to point to long-term trends that underpin a healthy performance of residential property investment.
If you are considering investing in a property but are unsure of the best opportunity that suits you, then I’m here to help. Here are five reasons why purchasing property in Malta makes for a sound investment.
1. Property in Malta is an appreciating asset
The property market in Malta has continued to remain strong over the last decade. Even catastrophic events such as the pandemic have hardly slowed the market down. In fact, at the end of 2020, results showed that the property development industry registered even better results than the preceding year, with sales surpassing the €3 billion mark.
One of the major reasons for the resilience of Malta’s property market is that, due to the island’s small size and growing population, land remains a highly valuable commodity. This is causing asking prices for sites and lands for development to increase, which in turn results in developers raising property prices.
This is great news for anyone looking to invest in a property. It essentially means that if you buy today, you are more than likely to make a significant profit when you come to sell down the line. This is true of nearly any property situated in any locality, not just prestigious areas such as Sliema, Swieqi, and Valletta. In fact, I have seen first-hand how the market has boomed. In 2020, one-bedroom apartments in Msida were on sale for around €145k. In less than two years, asking prices for similar apartments in the same area have jumped to €155k.
There aren’t many other assets out there that appreciate in value so quickly.
2. The rental possibilities are excellent
Investing in property is also an excellent way to generate a healthy passive income. Over the past decade, Malta has become home to high numbers of foreign students and expats looking to study and work on our shores. Many of these foreign nationals prefer to rent since they are not looking to stay on the island in the long term. This has created a strong demand for rentals in the market, with rental rates reaching all-time highs.
Buying property as a rental opportunity is considered to be such a safe investment that it’s not uncommon for Maltese landlords to invest in two or three properties. This is because the rental rates they can charge continue to exceed the bank interests incurred on property loans. This ensures property owners can comfortably pay off any loans and continue to generate an income from their investment.
3. Gaining a holiday home to enjoy with the family
Not every investment is driven by a need to generate profit. Some people look to invest to gain a valuable asset to enjoy with their families for many years to come. Malta offers plenty of opportunities to purchase holiday homes in stunning locations next to the coast. These residences make for great getaways during the summer season, giving the entire family easy access to the sea and nightlife entertainment. If you’re looking for a fabulous home, you might want to consider Sliema, St. Julians, Ta’ Xbiex, Valletta and Madliena.
The best part about investing in a holiday home in Malta is that owners can still make this asset work in their favour whenever they want. Malta continues to be a popular tourist destination and there is always interest from holidaymakers looking for short-term vacation rentals. Thanks to the rise of online property portals such as Airbnb, it’s simple and easy to list your holiday home when it’s not in use and create a generous side income.
4. The potential of conversion projects
Investors looking to make significant financial gain on a property may wish to consider a conversion project. In recent years, there has been a surge of interest in houses of character and old townhouses. However, many of these properties that enter the market are in a state of disrepair and need to be highly converted to become habitable. And the truth is, not many property buyers have the patience or energy to take on such a time-consuming project.
Investors with a decent budget and know-how can look to buy unconverted properties relatively cheaply, convert them, and sell for a premium price, ensuring they more than recoup their expenses. There is also a great government incentive in place to assist people buying properties in Urban Conservation Areas (UCA). The scheme allows for the exemption of stamp duty and capital gains tax on the first €750,000 when buying or selling a UCA property. All in all, you are looking to make a significant saving on your investment and reap the profits when you sell.
If a UCA conversion project seems like too much hassle, investors can also look into buying a modern apartment on plan in shell-form, doing the property up, and selling when completed in a two-year span. Here again, the chances of making a significant return on investment with a fast turnaround are high.
5. A safe investment for your children’s future
With property prices continuing to soar, some parents are naturally concerned about how their children are going to get on the property ladder when they come of age. That’s why investing in a property today could be a fantastic asset to hand down to the kids. It also offers them great flexibility and financial freedom. Your children can choose to live in the property, thereby saving them the expense of buying or renting. Or they can sell it off for a profit, giving them the capital to purchase the home of their dreams.
Considering how the market has progressed over the last 20 years, property can make for a truly lucrative investment opportunity. In an age where money saved in the bank is depreciating in value over time, the value of property has continued to rise. Cash is no longer king, but it’s property that reigns supreme.
Whatever your reason for wanting to invest in a property in Malta, I can give you expert advice and ensure the process is painless. Get in touch with me today to discuss your investment objectives and I can help identity fantastic opportunities to grow your property portfolio.
