Property Market Malta

There are many different views on how the property market in Malta is fairing at the moment.  Some are saying that if you have the extra cash to invest this is the time for investors to make their money work for them and others advise to hold back and be more cautious because no one knows if property prices will still go down even further.

The reality is that if you are an investor and you know your property markets and you are reading this you are going to tell me that there will always be opportunities during the good, bad and even the ugly times.

An investor has the eye for opportunities and is attuned to the market just as some professional real estate agents should be through their experience of dealing with these investors.  Most investors actually purchase their real estate through estate agents.  The market in Malta is still developing, there is a property surplus, and there has been an adjustment in pricing however this only confirms the fact that it is a buyers ’ market.  Real Estate agents in Malta are working harder than they ever had and the ones that are not capable (the cowboys), or rather do not know their business, are opting out of the business.  This means that the professional real estate agents are prevailing and are more attuned to the market than anyone else.  It is natural instinct that actually prevails -when it’s an easy market and you’re selling something like cheese cakes (pastizzi) you tend to relax on your laurels and watch the money come in to your bank account but as soon as the market seems to be harder and your lifestyle may be threatened then you gear up, consolidate, you keep your ears to the ground, go back to basics and survive.  The ones that do not have that ability will naturally quit the business and find other avenues.  The ones that have the ability and are trained professionally will ultimately perform better in such a property market because real estate agents tend to be more professional during such a period and as they are switched on to the market.

Property buyers and investors are more likely to find what they are looking for at this time than any other time.  Malta is still seeing movement in high end developments such as Portomaso and Tigne Point.  Portomaso, Malta is a development that is always desirable due to its location and amenities whereas Tigne Point is a good development which is not completed yet but is showing the strengths of being one of the top developments in Europe once it is completed.  Fort Cambridge has come up with new conditions which favour the buyer.  The developer is apparently bringing in a new partner that will even strengthen its position as a great development.  Pender Gardens, Ta Monita and other, smaller developments are also seeing movement in re-sales which again confirms that there is really not much of a slowdown in the market but an adjustment.

Nevertheless, if you’re looking to invest find yourself a professional real estate agent that will guide you through the motion and will provide you the service that you deserve.  They know how the market ticks and can definately assist you.

However you find a property to buy in Malta, during this type of economic climate real estate agents are bound to be in a better position to assist you in finding a property in Malta or Gozo.They are in touch with thousands of property owners on a daily basis wanting to sell urgently and therefore there may be a deal out there just waiting for you. So the better you know and work with them, the more likely you are to get the property you want.

Even though estate agents act on behalf of the vendor, those that sign up to a code of practice will look after anyone who registers and buys through them. Good agents recognise that treating buyers professionally is essential if they are to gain a sale. The really good ones also recognise a longer-term advantage if they treat you well — you may contact and instruct them to list your property for sale in Malta or Gozo with them later.

Put yourself in the estate agent’s shoes for a moment. Most people that register with them to buy a property never go through with it. Nevertheless, they still have to do all the work: get details prepared and sent out, follow up to see if they want to view a property, take them to viewings and continue to follow up on the vendor’s behalf.Imagine if half of your work were a wasted effort. How would you feel?So, don’t be too hard on estate agents. If you can show you are a serious buyer, you are much more likely to receive a good service and quality attention.

And don’t be too hasty to reject all estate agents. Unlike in the States, there appears to be a real lack of trust between agents, buyers and even the sellers.

Hopefully, having read these pages, you will better understand why agents ask the questions they do and do some of the things they do – even the things that irritate you.

BE SPECIFIC ON YOUR BRIEF

One of the most common ‘dinner party’ gossip complaints by buyers is that your agent sent property details outside his/her brief: the properties were too expensive, under the specified budget, had too few bedrooms, or too many, had no garden or something else that you did not want.

WHAT QUESTIONS AGENTS ASK AND WHY

When you register as a buyer, the first job for the real estate agent in Malta is to validate you as a real buyer for themselves and for vendors.They do this by asking standard, key questions. Here are some of them.

It can’t be stress enough the importance of being honest when answering any questions a real estate agent may ask. If you are not honest it is likely that you will be found out at some stage and your offer may fall through, losing you the property you wanted.

Have you a property to sell?

The agent needs to work out if you are a potential future instruction (you might sell your house through them). Furthermore, the agent wants to find out if you are in a strong position to buy.

Are you a cash buyer?

The vendor will want to know this. If you are not a cash buyer and there are properties that need to be sold quickly, there is little point introducing you to those.

If you are not in this position and went to view such a property, you would no doubt tell off the agent for wasting your time, Many people don’t really know what cash buyer means. There are two types. A real cash buyer has an amount of money that is immediately accessible and equals the price of the property to be purchased. The second type of cash buyer has nothing to sell, but needs a mortgage to fund the purchase.

What stage is your sale at?

If you are selling a property, the agent will ask whether you have received any offers, how long your property has been on the market and he may want to see it to value it and make sure that its priced to sell. This helps the agent assess if you really are intending to purchase and are not just having a look. It also helps them to judge how quickly you could make an offer and in what time frame you are likely to be able to sell your property.

Have you agreed or looked at obtaining a mortgage?

The main reason agents ask this question is that if the buyer does not investigate with a local bank, based on their salary/equity, how much they can borrow from the bank he/she may eventually end up disappointed later when he/she finds out that he/she cannot afford to buy the property because the bank will not provide them the finances required.This also affects the vendor which, at the end of the day, affects the reputation of the estate agent not to mention the hard work and wasted time of the agent having been mislead with a false budget.This happens all the time and can be frustrating for an agent.

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.

It is recommended that a reputable real estate agent in Malta will assist you in finding the right property in Malta.

Written by Herman Grech – Times of Malta

Property prices in the first quarter are down by 15 to 20 per cent compared with the same period last year, according to a preliminary report by the Chamber for Commerce, Enterprise and Industry seen by The Sunday Times.

However, there are also indications that the downward trend is “probably being reversed” as confidence slowly returns to an industry that is one of the major contributors to the economy.

The report was compiled by the chamber’s director general Kevin Borg, following a review among members in the Real Estate Business Section and of the Federation of Building Contractors (FOBC). Some its contents were published in the chamber’s monthly publication, The Commercial Courier, last Thursday.

According to Central Bank index, the price of advertised residential property declined by 2.7 per cent during 2008 but the FOBC believes this figure is underestimated because prices are being slashed further during the negotiations stage.

The FOBC believes that, in general, property prices fell by around 15 per cent in 2008 (compared with 2007) and by around 15 to 20 per cent in the first quarter of this year.

Tax revenues from property sales in January and February declined by 31 per cent while the number of Promise of Sale Agreements signed during the first quarter of this year declined by 6.7 per cent, compared with last year.

The FOBC confirmed that orders are down drastically and profit margins have been squeezed to a minimum.

The slowdown in the sector, together with the fall in price, is attributable to a number of facts, according to Mr Borg.

Despite its size, Malta clearly has an oversupply of real estate. The latest census in 2005 exposed 53,000 vacant properties, but since then thousands of others have come onto the market. Many have remained unoccupied.

Owners of large houses were encouraged by high prices to develop their properties into apartments for a profit, but various operators who took part in the chamber’s exercise said that the oversupply related mainly to ‘substandard’ tiny apartments.

Property development also boomed as a result of government amnesties enticing the public to bring back their foreign investments. Buoyed by relatively low interest rates, they converted houses into tiny apartments not realising that the property bubble was about to burst.

“Real estate agents do not regard this stock of substandard properties as sellable – certainly not at the demanded price,” Mr Borg said.

Although the market appears to be holding out in general and there is no particular rush to sell, owners of these so-termed ‘substandard’ properties will need to cut their losses and try to improve them to meet the standards demanded by the market.

Mr Borg said that contrary to public perception, the slowdown in the market was not caused by the international recession, which only marginally contributed to the existing over-supply situation due to a drop in foreign demand (especially British) for local properties. Some estate agent companies have meanwhile diversified their marketing efforts towards Scandinavia with reasonable success.

“Following a decade of rapid escalation, the pressure in prices was bound to cool off at some stage. This time round, what brought it about was an over-supply situation as investors – both new and established – rushed to the market,” Mr Borg said.

But while construction operators reported increasing difficulties in their activities, including shortage of demand and cash-flow since the start of the year, there seems to be light at the end of the tunnel for the real estate sector. Mr Borg said that preliminary figures show that the sharp drop in confidence and price expectation reported between November and January has started to reverse.

Given the clear oversupply situation in real estate and low investor confidence, developers, building contractors and other stakeholders should be encouraged to shift their effort and resources towards other forms of long-term projects with clear and tangible benefits to the private sector and society alike, Mr Borg said.

“We need to learn from mistakes and the authorities need to vet the applications properly to help a volatile market,” Mr Borg said.

In fact, the chamber is recommending that new permits for seemingly substandard developments be scrutinised thoroughly by the authorities to ensure adequate housing facilities. After ensuring that unsold poor quality properties are altered to acceptable standards, the chamber is suggesting that the government should enter into agreements with the private sector to utilise vacant buildings for social housing purposes.

The chamber is also recommending a review in the conditions surrounding the status of ‘special designated areas’ and a fine-tuning of capital gains tax.

Mr Borg said: “Above-all, short-term business and economic objectives should not come at the expense of environmental concerns.

“This will ensure a healthy balance between present and longer-term prospects for the sector and the Maltese environment in general.”

In the coming days, the chamber will be releasing the full data emerging from its perceptions and expectations surveys, which it conducts in conjunction with PricewaterhouseCoopers.

If your looking for a property in Malta it is recommended that you hire a reportable real estate company in malta so that you will be rest assured to find the right deal for you.

APPLICATIONS for permanent European Union (EU) residency via the country of Malta have certainly stirred considerable interest among South Africans.

A source from South Africa has informed  us that since opening their consultancy offices offices in Cape Town seven months ago, more than 500 South African applicants have sought the company’s expertise and service in securing permanent residency in Malta as well as potential property investment opportunities in the Mediterranean country.

At the heart of the Mediterranean, 93km south of Sicily, Italy, Malta is a large island retreat incorporating several smaller islands and is a member state of the EU.

Residency in Malta offers accessible business prospects with fellow EU member states, offshore investment potential, great tax benefits and easy access to countries within the Schengen area — the 25 European countries that have removed border controls between one another.

The increased demand from in particluar the Gauteng province in South Africa, has prompted the company to set up permanent representation in Johannesburg and there are future plans for representation in Pretoria and even Durban as well.

Malta is a country of favourable warm climate, an abundance of natural beauty inclusive of pristine coastal vistas and a history dating back to the Roman Empire.

As part of securing residency in Malta it is required that residency applicants buy or rent a property in Malta or Gozo, one of the nearby smaller islands. For your slice of the Mediterranean lifestyle and all the perks that go with, there are various properties that could be of interest.

On the east coast of Malta is Tigné Point. It is described as “a promontory overlooking the beautiful 17th century walled city of Valletta, the island’s capital and a world heritage site”,

“It is a mix of luxury homes, hi-tech offices, stylish shopping, trendy cafes and state-of-the-art health and leisure amenities,” says Bowling, director of Crusaders.  The first phase of the site was launched off-plan in 2002. Block T10, a residential component to the Tigné Point South phase, is almost complete.

Bowling says: “Block T10 comprises a series of spacious foreshore apartments with views of Valletta, a garden, the piazza or open sea.  This block offers a varied mix of apartments and duplexes as well as a choice of stunning penthouses.”

The apartments in Tigne Point have refined finishes, quality heating and cooling systems and provisions for ICT connectivity as well as sound and lighting options. The site offers pedestrian walkways, convenient access to nearby shopping facilities and swimming in the Mediterranean waters.

Apparently, out of 239 apartments of a total of 259 at Tigné Point have been sold. Prices of the remaining apartments start from € 400, 000

There is also Portomaso which is on the east coast — a beautiful waterfront residential site offering high end luxury living ideal for the enthusiastic yachtsman. The construction and sale of the residential component started in 2000. Much of the infrastructure, the 120 berth Marina, the Hilton Hotel, the Portomaso Business Tower, and most of the commercial elements were completed and operational in 2000. Residents moved into the first blocks of apartments in the same year too.

95% of the 400 plus apartments have been sold however there are re-sales like in any other project. There are a limited number of sea-fronting, three-bedroom units at 220m² for sale starting from € 880000 and a few one-bedroom landward-looking apartments from € 280000. However, resales are also available at lower prices.

Besides the above mentioned properties, there are other investments properties that are available on offer in Malta.  There are over 7 major projects that one could look into. Going at the same level of pricing as Tigne Point and Portomaso, and much lower.  There is a limit that you need to spend but you really dont have to break the bank.

Regardless of what some media say and few from the real estate community are claiming, there has apparently been quite some movement in the Maltese property market.  It is quite clear and unfortunate due to our small community negativity spreads quicker than a wild fire.  It sells media and can attract lots of attention to individuals that be looking for some sympathy…..

The life of a real estate agent in Malta is full of ups and downs and with the most part being the latter it is indeed classified as a hard career to crack.  A real estate agent works an average of ten hours a day, six days a week and when not at work should at all times be switched on seeking out  potential leads.  But, however hard this career maybe, it also can be very rewarding though only 15/20% of real estate agents are very successful.   The rest are what they call as non productive agents or middle level producing.

The process of buying a property in Malta can take two, three months or even up to eighteen months meaning a real estate agent only gets paid when keys have been exchanged and the money has been transferred to the seller.  The first stage of formalising the purchase of a property in Malta starts with a Promise of Sale which binds both parties by law over a holding deposit, during the time in between the Promise of sale and the closing where all searches are carried out to confirm that title of the property is actually owned by the seller and the seller has no outstanding hypothecs or loans with the bank or any institution for that matter.   Some less fortunate real estate agents in Malta or anywhere around the world don’t see any fruit for several months until they decide to move on and see a different career.   These real estate agents are the ones that tend to look for sympathy and hide behind their stories of how badly the property market is doing.  Negativity does not assist him in his production and neither will help his or her colleagues encourage people to purchase property.   One may sympathise with the person however there is always risk that you fall into this trap and assume all is bad when that is the only opinion of one person.  There you go and this is how ant hill’s are turned into mountains.

The Facts

Just recently, two of the largest real estate companies in Malta featured in interviews with a National Newspaper.  One of the titles stating boldly; “Recession?  Bring it on” written in the Business Today last Wednesday and the other articles title, written two Thusday’s ago in the Business Times supplement of the Times of Malta was “Overpriced property ‘corrected’ by 10 to 15%” and in the body text read that the particular company sales were actually up by 10/15 % during that same period last year.  There was also another article written regarding the Midi Devopment called Tigne Point where the heading of that was “Sales unaffected”.

Do your research on the net and talk to credible scources – unfortunately in Malta you do get alot of negativity.  Avoid that and once you have done your research talk to a credible real estate company in Malta and we are sure you will find what you are looking for.

Written by Anthony Manduca http://www.timesofmalta.com

The global economic crisis has had little impact on Midi’s investment plans or on its sales, according to CEO Ben Muscat. Speaking in an interview with The Times Business Mr Muscat said that Midi did very well when it launched the T10 properties last July – just before the global crisis was emerging.

“There has not been any direct impact on our investment. There has been a slowdown, as one would expect, in terms of enquires, and also a slowdown in the rate in which apartments we have sold have been re-sold. However, since January this year we have concluded one to two property sales per month, predominantly to foreigners, and we are talking about a value of between €700,000 and €1.8 million.

“There is a certain calming of enthusiasm, with regards speculative investment but as we speak we hardly have any property to put on the market,” he said.

Mr Muscat said that most of the expatriate money buying into the Midi project has gone into residential parts of the project and about 30 per cent of all the property revenue values are today derived from foreign buyers.

“Tigné Point has been an important magnet for foreign direct investment into Malta. Tigné South in particular is proving to be a very attractive rental destination. Maltese investors are renting out their properties mainly to expatriates at very attractive rental rates. There has also been some foreign interest in the commercial offers at Tigné Point and Manoel Island although this has been dampened somewhat by the global economic climate.”

He said that foreign buyers have purchased property both as an investment and as a second home. “There’s a mix. The majority have purchased property to own, to visit from time to time. Foreigners are attracted because of the underlying investment value as well as the tax advantage to reside in Malta.”

Mr Muscat points out that about 40 per cent of the total purchases had originally been bought as investments but added that since then most have been transferred to end-owners who could be eventual residents at Tigné Point or who would be keen on renting. Midi has now transferred the ownership of 160 apartments, 80 of which are occupied by Maltese and foreign residents.

The Midi CEO explained that although the Midi project, which consists of apartments, a retail centre and a business centre, is now moving ahead on target, “the progress at Tigné Point has been obviously dependent upon the rate at which planning permits were issued, and this is obviously a very crucial factor”.

He points out that there were times when some of the work had to be stopped because the permits for the subsequent development phase had not yet been issued.

“Kicking off a phase is not something you do overnight – there is a whole process that you have to go through such as tendering, procurement, and mobilisation. Therefore unless the permits are available months ahead before works can start on site, you are left with a gap which slows down the whole process. This has particularly been the case in works for Tigné North,” he said, with a hint of frustration at the official bureaucracy he has had to put up with.

However, substantial works have been completed and others are in progress. There is also a lot of work underground – such as parking and roads leading to the area – which are perhaps not as evident, he explained.

“We are in the process of completing the last works on Tigné south, which we refer to as blocks T8/9 and T10, of which a number have already been delivered to owners. Another 60 apartments should be completed by the end of the year. The 59 apartments of T10 were put on the market at a time when the international financial sector had already started to look shaky, but they were marketed as up-market very well finished apartments. These sold very well and out of 59 apartments launched we now have a stock of 19 apartments.”

Mr Muscat said that the clubhouse facility underneath Tigne South, which includes a pool, deck, restaurant, lounge bar and a fitness centre is now almost complete should be available for use by residents of Tigné South by next month.

“The Plaza phase is also well on its way to completion. This involves a large piazza which will be the largest one in Sliema with four levels of car parking underneath it and surrounded by boutiques and 20 duplex apartments above these ground floor retail units.

“The commercial retail centre, branded as The point, should be open to the public by spring 2010. This time next year we should be looking at a very substantial chunk of Tigné Point comprising the retail centre, the piazza and car park facilities, with shops and restaurants around it, the clubhouse, Tigné South, and Tigné Fort all complete, and all functioning as a whole.”

Asked if the owners of Sliema’s retail outlets, especially those at the Ferries or Bisazza Street, were justified in feeling threatened by the 60 retail units planned at the Tigné Point, Mr Muscat said: “Together with the piazza this will be a very attractive destination for shoppers and visitors alike. The retail units will sell a mix of high quality luxury brands along with other brands which have a wider appeal. Tigné Point is first and foremost a destination which will be open to the public. There will no doubt be a pull of visitors from traditional centres in Sliema to Tigné Point.

“However we do not think this will rob the current retail destinations in Sliema, such as the Plaza or the Ferries, of its clientele. If anything we see a future where Sliema in general, as a visitor and retail destination, will be much stronger than it is now. I think that in the long-run Sliema stands to gain. Obviously Sliema will gain at the expense of other destinations such as Valletta for example.”

He added: “Retail locations tend to move. We all know what happened to Prince of Wales which at one time was a very important shopping destination in Sliema but the trend moved away to the Ferries, Tower Road and Bisazza Street. Things will happen but we don’t think that Tigné Point will directly compete with the shopping areas of Sliema, but these destinations can complement each other.”

Mr Muscat said that the first phase of the restoration of Fort Manoel, which consisted of the work done in all the areas around the parade ground is now almost complete. The barracks have been restored, works are now on-going on the parade ground and the chapel has been rebuilt, cupola and all.

This restoration phase is now being followed up with the installation of apertures to all the restored buildings and with the laying of basic infrastructure that is intended to feed all the services, such as water and electricity supply and drainage facilities to all the buildings restored and rebuilt. Midi also undertook substantial work related to the restoration of the bastions as is evident when viewing the Fort from Valletta.

He said the restoration works associated with Fort Tigné are also ready and work is being carried out on the lighting scheme “which will light up the fort and which will create quite a spectacle.”

Everyone is talking doom and gloom in the Maltese property market, yet property sales are still growing. The real estate market has just changed, and perhaps for the better.

The rise in property prices in 2005, 2006 and 2007 were unjustified increases created by vendors, who were just being too greedy. Naturally, many investors who were hard hit in the stock market and decided to diversify their investments by purchasing property did not help. This sudden demand created a fake economy that was bound to burst. It was just a matter of time.

Normally, banks and financial institutions increase their interest rates to stop this type of inflated economy, but in reality they too were enjoying incredible profits, so their decision was to be cautious but go with the flow and enjoy it while it lasted.

The government did not help either. The timing to slow down this positive attitude in the country was not favourable and election was close, so it also decided to go with the flow and hang on. But how has this affected us? Where do we stand today?

Many ask the same questions. ‘Have property sales decreased over the last couple of years?’ Of course they have. ‘Has property gone down in value?’ Of course it has, but in reality the decrease in value is justified and certainly could have been much worse.

Iceland is a perfect example of what a country can go through when one allows unjustified increases in property value. Dubai and Bulgaria are going through similar situations, because supply is much larger than demand.

Architects and real estate professionals need to be careful to give precise valuations and not just try to satisfy vendors by giving them values they want to hear. I have often been asked by clients to give a fair valuation, and on entering a property vendors blurt out the sum they expect to sell it for.

The first quarter of 2009 has shown a rise in the number of sales in upmarket properties in good areas, such as villas, bungalows and seafront luxury properties, and also a decline in sale prices in the first-time buyer sector, two trends that indicate that the property market is slowly stabilising itself, since higher-value properties are always the first to smoothen the curve.

Hopefully, this momentum will continue. However, more importantly, to benefit from this new wave of buyer activity, it is imperative that properties are marketed properly and at a competitive price.

Property sales at auctions are doing well. There are a substantial number of first-time buyers looking for a home and we have seen a large numbers of extremely wealthy foreigners seeking property in Malta due to favourable tax rates.

The government should keep pushing such attractive incentives. One silly law is that a foreigner is only allowed to purchase one property, unless it is located in a designated area. Foreign investment has kept Malta alive for centuries, and a wealthy foreigner wishing to invest in Malta should be made welcome.

Analysing market trends, one notes that potential investors now deem the market to be at its lowest point. Lower bank interest rates are spurring renewed activity among buyers, who previously adopted a wait-and-see attitude. These factors could well represent a sudden release of constrained demand. Moreover, vendors are listing homes at fairer and more competitive prices, which consequently leads to an increase in viewings and more offers.

At the auctions, we have seen an increase of serious vendors. These might want to buy a larger home or invest in a business or are just looking for early retirement. The point is that the real estate market in Malta is still going strong. There might be an abundant amount of apartments, but the demand for good value property is there.

A few Maltese investors are turning to Sicily, England and Spain to invest their savings. They believe the grass is greener on the other side. I wonder how quickly one can now sell a property in Bulgaria or an apartment in Dubai.

Buying property in Malta and Gozo has always been a sure investment; it’s just a matter of time. Unlike other countries, we do not suffer the drastic fluctuations of property market value because we have always invested in our own homes.

We are not accustomed to rent but to buy, and because land is extremely limited, the value of property will always be a secure investment, especially if we think positively and invest wisely.

Courtesy of www.timesofmalta.com

Funding a property to buy-to-let is different to funding your own home. The key difference is that you need to approach buying to let as a business, throw personal choice and preference out the window and consider carefully how and what you spend money on within the property.  You may need some professional advice from your preferred real estate company in Malta.

There are specific costs you will come across when buying and preparing a property for letting that you need to add to the formula when you are looking for a buy to let property in Malta.  You have to calculate the notary fees, stamp duty, tax on rental, architect fee’s if they are required, as well as the costs to redecorate and furnish the property.  You have to keep your eye on the ball as there will be real estate agents in Malta that will calculate a percentage rental income without including these costs so ask the question.  They may not do it maliciously but only through inexperience and lack of training so you need to always be a step ahead.  Especially in today’s market, if you buy incorrectly you may find yourself with a financial burden that you can be stuck with for a while until you manage to sell.  You also need to calculate that if you are buying a property to let in Malta or Gozo then you need to plan long term and look at eventual appreciation of the property.

It is recommendable to speak to an accountant and view what expenses you can claim back against rental income.  If it is furniture, plumbing works, rental commission, a brand new kitchen, VAT from rent or other expenses it is important that you are in cue.   Planning is key.

However, as with buying a property for yourself, one of the first considerations along with the above should be how you are going to fund the purchase. You may have the cash to buy the property outright, or need to part fund and part-borrow.  You may be able to borrow more money from your existing lender, or you may be able to borrow most of the money through a buy-to-let mortgage.

As this is a business and not a personal purchase, most investors prefer to borrow as much as they can.  The reason is that any expenditure on arranging the mortgage, such as advice and fees for securing the loan plus the interest paid on the mortgage, is tax deductible. However you decide to do it, if you borrow you must advise a lender in writing that you intend to buy-to-let.  A real estate company with a letting department will be able to assist you on where to go and will be able to value the property for bank purposes.

RESEARCHING POTENTIAL PROPERTIES

It is important that you do our research and find out what customers are renting, who are renting these properties, what location is the most propular and what types achieve best rental income.   One would not think that percentage of rental income achieved from a one bedroom apartment would be more than a three bedroom apartment and neither would anyone think that a appreciation of a one bedroom apartment would be less than a luxury apartment in Portomaso.

It is important that you lay all the cards on the table with your real estate agent and discuss all possibilities.  View as many properties as possible and consider the options so you make a knowledgable decision.

Before you dive in to the buy-to-let investment, it is recommended that you also check what else you could invest your money in and the type of return you would gain.   Buying a property in malta to let is a long-term investment and your money will not be easily accessible.  So make sure that any money you invest you are not likely to need for some years to come.

Although property prices haven’t shot up over the last year in Malta it does not mean they will be going down.  And although there is no guarantee that this won’t happen, one must look at the tradition (the buying trend of the Maltese), what is actually happening in the rental market to-date and what the government are doing to sustain the economy and improve it .

There has been a price correction due to many overpriced properties that were on the market that were unsalable.  The reason for this was either because the developers bought expensive or they thought that they could achieve a better price due to their own marketing reason.   However just like in any market when you cannot sell and neither can your competitors you change your strategy and you move on to the next opportunity.

Today’s rental market is buoyant.  Companies still fancy setting up their businesses in Malta and their employee’s always require accommodation for long term.  With the iGaming Industry and other industries still growing on the islands the demand for properties to rent in Malta is probably at the highest it’s been in recent years.  Malta is also waiting for Teecom Ltd to commence with the development of Smart City that will be creating over 5000 jobs of which at least half will be taken up by foreign employees – not to mention the consultants as well as construction workers that will be employed to work on the development.

Maltese believe in brick, which is an age old tradition where you find Maltese parents assisting their children to buy their first property and this is still happening.

To buy right you need to understand the market and be involved or you have to be able to rely on a professional to guide you correctly.  If you go sole and try to buy a property on your own you are risking that you lose out and make the wrong decision.  Real Estate agents in Malta are now attuned to this fact and are studying the market carefully for good buy-to-let opportunities.  You need to get on their books and be specific with what you want so they can assist you.  The truth is that there are always opportunities in any type of market.  You just need to be in the right place at the right time or use the right real estate company in Malta to assist you.