Is the property sector running on steroids? Are increases of property prices surpassing that of Hong Kong?

Published on Times of Malta – Business Observer – 24th October 2018

PKF Malta’s Advisory division has recently compiled a database containing various types of properties available on the market. To this end, PKF’s study seeks to fill in the gap in the current debate about the sustainability of the luxury property market following recent announcements of a number of large-scale developments approved by the Planning Authority.

It is a fact that demand has recently pushed the rate of increase in property prices at a pace exceeding that recorded by Hong Kong. PKF has also carried out a number of stakeholder consultations to discuss the quantification of such luxury developments is it for residential or commercial purposes. To simplify the assessment, PKF has used a common conversion factor in order to arrive at the supply of high-end properties in the coming 3 years.

It goes without saying that the demand for rental or purchase of high-end properties largely originates from high-net-worth individuals, including but not limited to individuals who take up the IIP scheme, local demand for buy-to-rent, foreigners both visiting Malta for leisure and business purposes and also from foreign direct investment. Using publicly available information and a number of reasonable assumptions, the demand for high-end units for the next three years was quantified.

Are we having a persistent rise in prices to the point where luxury properties are well above their fundamental value?

Will there be a mismatch between supply and demand in the immediate future?

PKF Advisory kindly invites relevant stakeholders from all fora to meet us and discuss our findings, with a view to fine-tune the study and assess what remedial action is necessary (if any) to dodge the exuberance on this property segment.

This independent study is being undertaken on PKF Malta’s own initiative as part of its corporate social responsibility. PKF has obtained direct assistance, free of charge, from a major real estate agency in obtaining specific information on the market. No other interested third party is financing the study.

Interested parties who wish to set up a meeting can contact:

Ms. Miriam Sultana
Head of Advisory
Published on Times of Malta – Business Observer – 24th October 2018