Speculating on property in Malta

Not so long ago, every other television show seemed to be about renovating run-down property or home improvements. With the current real estate market in Malta being less enticing, these shows seem to have dropped off.

The irony is, of course, that now is the time that you’re more likely to find a bargain.

If indeed there are more and more buyer’s markets throughout the world, then for those with finances available, there’s never a better time to get a good deal. Therefore, we’ve put together four essential factors that you must consider to ensure that you complete the project with as much financial reward as possible.

CONSIDER THESE

1. Purchase Price — The lower price you pay, the more potential there is for profit it at the end. Remember, you generally make the money when you buy, not when you sell!

2. Renovation Expenses – Be as exact (and honest with yourself)as you can for each room that you are renovating, and include some “room-to-move should you be faced with the inevitable surprises (such as dampness, termite problems, legals).

3. Holdings Costs — The longer you own the property, the higher your costs for mortgage, taxes, and insurances will be.

4. Anticipated Sale Price — Be honest with yourself and compare your property like-for-like with others that have SOLD (not that have just been on the market for an eternity).

When undertaking a renovation, take into account how long it will take to complete. From “go to woe”, the market conditions could have changed immensely (for good or for bad) so try and take into account each scenario and what your subsequent actions will be (eg. if the market is worse, what would you do?)

Simply by doing your homework you’ll ensure you reduce the number of surprises. If you are interested in finding that bargain or if you are looking for any tips on selling your property in Malta you should speak to a reputable real estate agent in Malta that will guide you through the process of buying property in Malta.

Malta Property slowdown persists

A finished apartment advertised to sell at €80,000 in March 2008 would have had almost €9,000 cut from the asking price a year later, according to the Central Bank of Malta’s property index,

The asking price for finished flats, the most common type on the market, was down by 10.8 per cent in the first three months of the year when compared to the same period a year before.

The figures published in the bank’s quarterly review yesterday showed that the year-long slowdown in the property market accelerated in these three months of this year. Malta Property prices in the first quarter dropped by 9.9 per cent when compared to the same period a year before.

The sharp decline was more than double the drop registered in the previous quarter when prices fell by 4.4 per cent.

The bank said lower asking prices were observed in seven of the eight property categories surveyed. Apartments in shell form and houses of character saw prices plummet by 20.4 per cent and 16.2 per cent respectively.

The price for townhouses also dropped by 11.8 per cent while finished and shell form maisonettes saw prices slip by 4.4 per cent and five per cent respectively.

Terraced houses were the only property type to buck the trend, with the asking price rising by 4.1 per cent.

The slowdown was not only visible in terms of price but was also confirmed by a 21 percent drop in the number of advertised properties in Malta and fewer permits granted for residential properties by the Malta Environment and Planning Authority.

Prices of property in Malta  last year declined by 2.7 per cent when compared to 2007, with the asking price for flats in shell form and in finished form, which together make up over half of the sample, going down by two per cent and 5.4 per cent respectively.

The first quarter figures are broadly in line with the findings of a Chamber of Commerce, Enterprise and Industry survey for the same period, conducted among members, which had found prices of property in Malta were down by 15 to 20 per cent from the first quarter of last year.

Written By:  Kurt Sansone  - The Times of Malta 

 

Malta Property in Mellieha

Mellieha was once an isolated 15th hamlet perched on the ridge overlooking Ghadira Bay. It was abandoned for a couple of centuries because of its vulnerability to pirate and Saracen attack. Re-inhabited in the early 18th century, it has since developed into a flourishing town though it retains a quaint historic centre with narrow streets and stepped alleys. From the terrace of the Parish Church, there is a panoramic view over Mellieha Bay and the surrounding countryside. Beneath the church is the Chapel of the Blessed Virgin, a national shrine. A fresco of the Madonna and Child is said to have been painted by St Luke. This legend has made the troglodyte chapel into a popular place of pilgrimage. The walls are lined with ex-voto offerings and paintings - a testimony to the devotion of the people. Mellieha today is a modern town noted for its large private villas and houses which have been built on land overlooking the bay. While the town has developed into a resort, it has managed to retain some of its rural character.

Santa Maria Estate, in Mellieha is an exclusive small town located practically on the seashore where luxury Villas and Bungalows with pool have been built by the Maltese and foreigners looking to reside in Malta. Its is a very popular Villa rental area where one can also benefit from renting their villa during the summer months if they were interested in an investment. The views are spectacular. All amenities are close by and are just a 5-10 minutes walk up the hill where you will find supermarkets, bars, restaurants and other entertainment.

Over the years, the property market in Mellieha……… Read more about Property in Mellieha

 

Malta property overview

While property prices have plummeted in practically every country around the globe, the effect on Malta property market has been nowhere as radical, with average Maltese property prices recording an annual fall of just 2.7 per cent last year, according to Malta’s Central Bank.

Property in Malta boomed between 2003 and 2004, recording price increases of 20.3% and 13.3% respectively, after a 2003 referendum voted in favour of Malta joining the European Union on 1 January 2004. The introduction of Europe was not the only key denominator for the increases of property prices but there was also the launch of luxury developments such as Portomaso and Tigne Point that triggered interest from various foreign investors. 

Just off the coast of Sicily, Malta, which comprises an archipelago of three islands, with a population of over 400,000 inhabitants, has been popular amongst overseas nationals for a long time. This is not only because of the intense Mediterranean climate, but also owed to the country’s tax-efficient status; Maltese residents enjoy one of the lowest levels of income tax in Europe.

Demand for property in Malta

The demand for property in Malta over the last year has decreased slightly according to some reports however this still has not effected the sales of the more luxury developments in Malta.  Some agencies have stated that they are on an increase by 15% to 20% due to such demand.  Others have said that they are selling more units but cost per unit is lower.  According to Regional Director of RE/MAX Malta, he sees the reduction being a genuine correction in the market and now prices are more realistic which has created a buyers market.

Malta property prices start to stabilise

Although housing values are still falling in some areas, they have already stabilised in other regions, mainly because most Malta property owners are not so highly leveraged through borrowed money, as say those residing in the UK.

Despite the short-term market slowdown, the Malta property sector could find itself flying high in the medium to long-term, buoyed by growing tourism levels and an ever-increasing number of low-budget airlines.

Easy access to Malta,

EasyJet, Ryanair and Scandinavian Airlines, all either introduced or increased its direct routes from the UK and Sweden to Malta.  This encourages greater tourism to Malta as well as further interest in Malta property.

Rental investment properties in Malta

The yield on rental property in Malta is not so high, you will probably see a rental income equivalent to between 3.5% up to 6% depending on the property you buy.  You will also get a healthy appreciation over the medium to short term investment period.  This is where the use of a reputable real estate agent in Malta will come in handy.

The process of buying Malta property

Anyone who actually goes ahead with a Malta property purchase should find the buying process pretty straightforward. The legal purchasing system in the country presents a relatively safe buying environment.

Deeds are presented upon completion of the property purchase, while the legally binding contracts are presented in English.

Investing in Property in Malta

Real estate investors in Malta have done well in recent years, with good annual increases in prices over the last ten years.

But with EU membership now two years old, and questions last year about Malta staying as a mainstream holiday destination, future potential became questionable. Real state agents in Malta though seem fairly confident that the rises will continue for a while yet.  At the beginning of the year two leading international real estate agents predicted ten per cent inflation for 2007.

One factor that investors could be taking into account when looking at the possibility of buying a property in Malta is that since the financial crisis Malta property market is still quite stable with realistic decreases in prices on a national level without reall affecting the high end market.

Malta’s low taxes are also inceasingly attracting new residents this year. With tax at less than half of many other EU countries, buying real estate in Malta often makes economic sense, as well as being a home in the Mediterranean for many.

Buyers from the UK in particular often cite Malta’s low tax regime as one of their primary motives for moving to the island however the great lifestyle coupled with the fact that practically all the island speak english are clse seconds.

British Investors

Ryanair’s new routes from London and Dublin to Malta have proved a success both for the airline and for the island since the launch in November of their Luton flights. Initial estimates of an extra 80,000 tourists due to Ryanair might be much lower than the true figure when results are published. Reports suggest that Ryanair might be considering further flights to Malta from different destinations. Whether this will be from the UK or elsewhere isn’t clear yet.

The popular low cost airline easyJet has also assisted the trade and there are rumours that the airline may add a couple more routes other than their popular Gatwick London route.

Air Malta, the island’s national airline, has run a successful campaign to sell seats, and has opened up a new route from the North-West of England, flying from Liverpool’s John Lennon Airport.

The advantage Malta has for UK and Irish visitors is that they drive on the same side of the road and English is spoken, and for non British Isles visitors Malta has well known language schools where they can learn English.

A 2 bedroom apartment in the popular Malta holiday resort of Qawra is currently on the market for €121, 127 and a three bedroom two bathroom apartment in equally popular Mellieha for € 197, 000 negotiable. Property in St. Julian’s and Sliema for expatriots are probably most popular prices start from € 130, 000 whereas places like Portomaso and Tigne point are also popular where prices for these high-end luxury property in Malta start anywhere from € 320, 000.

‘With lower fares, Malta becomes a destination viable for 3 and 4 days trips a few times a year from the UK, and that will attract buyers to look at Malta in the same way they do France and Spain when considering where to buy a holiday home abroad. The weather in Malta and low fares could be a magnet for buyers’, commented one local travel guide recently,

Considering the Maltese property market has not been as affected as the Spanish or the French markets, the low tax rates in May also encourage investors to come to Malta.  If you are interested in buying property in Malta and living luxury in the Mediterranean it is recommended to contact a reputable real estate company.