The Malta's Property Market – A True Picture by Grant Thornton in collaboration with Dhalia, update published.
The latest release of The Malta Property Market – A True Picture shows that when buying an environmentally sustainable apartment at €200,000 (which is energy efficient, reduces the cost of energy and for which a favourable green loan scheme is applicable) can yield potential financial benefits to the tune of €43,700 over a 30-year period, 44% of which are realised within the first 5 years.
The findings of this report were presented by Grant Thornton’s consultant Daniel Gravino, during the launch of the latest update during an event held on Thursday 20 April at Trident Park in Mriehel. This release is an update on the previous reports and includes new insights.
Gravino added that a significant indication that emerged from the data is that “a two-adult household based on two income earners on minimum wage, afford a maximum house price of around €145,000 which falls significantly below the average market price for a finished housing unit of €260,000”. This raises concerns on affordability and striking a better balance between affordability and environmental sustainability can lead to more affordable and equitable housing options.
The Malta Property Landscape – A True Picture is an analytical report produced by Grant Thornton using Dhalia’s extensive property database and market development data. The first edition of this report was launched in June last year.
George Vella, Grant Thornton’s Partner, said that Grant Thornton’s market knowledge and economic analysis expertise in combination with Dhalia’s extensive property database provide an economic perspective on the property market essential for policymakers, businesses and people investing in property alike, allowing them to make informed decisions.
Amongst other insights presented by Gravino, it was reported that during Q1 of 2023, although the housing price index remained at 9.8% higher than the average price that prevailed in 2019, it experienced a decline of 2.9% when both the Maltese property market and economy registered growth at a very fast pace. During the same period under review, rental prices remained relatively unchanged from 2022, suggesting that the recovery to pre-COVID-19 rental prices has been sustained.
Furthermore, during Q1 of this year the number of final deeds when compared to the same period of the previous year was 9.4% less. On the other hand, the number of registered POS agreements increased by 14%. This trend is indicative of an expected increase in housing stock over the next 2 to 3 years, as units typically come onto the market with a time lag. Based on forecasts for the Maltese economy, it is estimated that the additional supply of housing units will exceed further demand for 2024 and 2025, thereby possibly applying a downward pressure on prices.
This release also features commercial property for the first time with a focus on commercial spaces, indicating that the development of office space works commenced between 2017 and 2022 will create more supply of office space than what is actually required to accommodate the registered increase in office-based employment.
Hon. Minister Stefan Zrinzo Azzopardi who opened the event on the day, emphasised the importance of educating the consumer on the benefits of energy efficiencies buildings. “It is of great importance that consumers are made more aware of the qualities and advantages of energy efficient buildings. Information is key. I firmly believe that estate agents have an important role to this effect. When promoting property on the market, it is high time that estate agents take an active role in promoting energy efficiency in buildings.” concluded Hon. Minister Stefan Zrinzo Azzopardi.
Gravino said that the latest figures show that there may be an oversupply of office space, especially when also taking into consideration that the demand estimates do not account for the growing trend of persons working from home. In part, this is also corroborated by the decline of 11% in the average rental price for offices between 2019 and 2022.
Commenting about the event, Alan Grima, CEO Dhalia stated that by delivering comprehensive insights into Malta's property landscape, we are committed to empower stakeholders to navigate the evolving market confidently. “With dedication, collaboration, and transparency, our aim is to contribute to sustainable growth, fostering equitable communities and a thriving property industry for the future of Malta."
The presentation of findings was followed by two panel discussions namely ‘Financing the Future’ – Balancing affordability, energy efficiency and social responsibility, followed by ‘Redefining Malta’s Commercial Property Landscape’ – The challenges and opportunities in the commercial property market. The panels were composed of various specialists from the industry including APS CEO Marcel Cassar, Housing Authority CEO Matthew Zerafa, Best Deal Director Erskine Vella, Trident Estates CEO Charles Xuereb, AX Real Estate Denise Xuereb, Valuation Specialist Perit Justin Mizzin from Archi+, Grant Thornton’s Partner Oriana Abela and Manager Francesca Vella and Dhalia’s Chairman Chris Grech and Branch Manager Gordon Dalli.
Both panels were moderated by journalist Keith Demicoli, who put forward some very interesting questions and challenges.
A copy of The Malta Property Landscape – A True Picture can be downloaded from the following: The Malta Property Landscape
Founded in 1975, Grant Thornton Malta is one of the leading accounting and business advisory firms in Malta. Our clients include local and international privately held businesses, public interest entities and government entities. Our business advisory team specialises in financial and business services and committed to deliver innovative solutions to companies who are exploring the possibilities of investments.
Over the past 40 years, Dhalia Real Estate has built an outstanding reputation in the real estate market. Today we are proud to be industry innovators, leading the way in prop-tech and other digital innovations. Through the combination of a highly skilled network of property consultants and powerful digital tools, we match the most suitable properties to a client’s requirements.