Property

Eurostat report states that from 2000 until 2012¸ Malta GDP Growth Rate averaged 0.42% reaching an all time high of 5 % in March of 2002 and a record low of -3.70 % in March of 2009. It was the impact of economic recession hitting most of the largest economies in the world. In recently presented Budget 2013¸ the deficit for 2012 was reported to stand at 3.3% of GDP. In next year¸ it is expected to reduce to 2.7% and in 2014 to 2.1% of GDP.

The deceleration in Malta’s economy is reflected in the real estate market¸ a key indicator of the health of an economy. The Eurostat survey reported that property prices in Malta rose in the third quarter of 2012¸ while prices in the EU fell. Property prices were one per cent higher when compared with the same quarter of 2011¸ the index shows. Other eurozone countries saw prices fall by an average of 2.5 per cent. This declaration in price increases has been ascribed to an oversupply of vacant properties on the market¸ and has been accompanied by a slowdown in the construction industry¸ though so far employment levels are still holding steady.

As long as they continue to hold steady¸ it provides an indication that the industry is hopeful of a reasonably prompt turnaround. Buying property has long been the main form of investment activity among the Maltese¸ who see land as a secure¸ long-term investment on an island where land is limited. This accounts for the steady rise in property values over the years and for the tendency among local investors to steer away from speculation and pass their land down through generations. EU accession and the phasing out of ownership restrictions initially propelled the property market to new heights¸ with prices rising by 12 to 15 per cent a year. Those increases have now slowed down of course¸ but observers maintain that in the long-term¸ space limitations on Malta will sustain demand and ensure that property remains a safe¸ sound investment.