Buying Property in Malta as an Investment Just like in any property market, during the good and the bad times there are opportunities. And on most occasions during the not so good times there are even more opportunities for investors. However, unlike the media makes it out to be and although it is true that property prices of property in Malta have been cut on an average of 15 to 20 %, Malta is hardly being affected by this so called financial crisis.
We are blessed so to speak because of our shrewd bankers in Malta who do not just give money away without pure evidence that this loan will be paid. Their searches and background checks are thorough and they will only make a calculated risk unlike they do in the UK and in other countries like in the US. Bank of Valletta and HSBC Malta are both reputable and strong banks on a local and International level. I do not understand how easy one can practically receive a loan without even going to the bank in other countries. I don’t know how it is at the moment however in the UK they actually used to sell loans to people.
I remember a friend of mine telling me that he was with his wife who was from the UK and one day whilst they were in Malta, she needed to arrange something with her bank. She was not making her loan payments and she needed to get a moratorium for a few weeks as she was waiting for funds as she had just rented her apartment in the UK. After her conversation with the bank, she realized that she had just borrowed an extra £ 10, 000 to make her payments on her loan as well as pay off her credit cards and she also applied for a non-interest loan which would mean that she cut her loan payments in half. This really made sense to her at the time because the bank relieved her of her stress for a few months and at the same time gave her more spending power. The funny thing is that the bank did not say anything about the fact that she was domiciled in Malta, that she no longer was receiving the same UK salary that she was being paid when she lived in the UK and they also for her convenience sent the papers to Malta for her to sign. For my friend this seemed ludicrous and that she should not take up the offer of the bank. To cut a long story short, she took it and would realize later that the rental of the property in the UK fell through, she ended up even more stressed than ever before and finished up putting the property on the market for sale which took almost twelve months to close and sold it for 25% less than the original valuation due to the crash of the UK market. If it wasn’t for her husbands financial stability she would have not made the loan payments and the bank probably would have foreclosed on the property. The banks may have took too many risks without thinking of their customers future and this ia one of the said reasons there was such a crash in property markets in other countries whereas in Malta even if you have a client with twenty million Euros in the bank you still have to go through a series of checks before you finally receive the confirmation of the bank.
The property price decline of property in Malta is said to be due to a number of reasons. The first is that property prices in Malta were overpriced in the first place due to a fake economic increase caused by new developments of better quality (more expensive) being put on the market compared to a lesser quality that was being marketed at the same price. Developers also took risks on buying expensive land. Government did not stop giving permits to property developers when there was already 1000’s of properties on the market. Government gave permits to areas to build an extra floor or two which encouraged property developers to buy houses in nice residential areas for development and sell expensive due to cost of land and quality finishes.
Hearing from the main real estate companies and developers that build and sell their own property in Malta saying that their sales have not been affected makes one wonder what the real (estate) truth is. The facts are that in a down market opportunities to buy good property in Malta or anywhere else are available. If you have a quality product and its priced well it will sell.