The Central Bank of Malta presents figures and facts about the economic situation in their annual financial report about the country. The figures that are analysed in the report are of the previous year. According to the report, the prices for properties increased by 0.5% last year. This may not sound like much at first glance, but the current difficult economic situation in the EU should be taken into consideration when looking at these figures. Other countries in Europe, such as Spain, Italy and Ireland are struggling with a dramatic real estate market price slump, and Malta can even see an increase.
This development is particularly interesting for foreign investors who see Malta as a potential investment destination. Prices of real estate are often a key indicator as to how well the economy of a country is doing. Major investors in Malta generally invest in larger real estate projects that yield a return of at least 5%. For example, the Tigne Point developments. Many huge residential buildings have been developed here, and many apartments have been sold already. These are now being rented out at exorbitant prices.
The Central Bank of Malta pointed out that these prices may be slightly inflated, and do not correspond to the actual value of the property. However, in my opinion, this statement is difficult to assess, as the prices for real estate usually correspond to the demand, and if a price increase is possible, the price will correspond to what buyers are willing to pay. However, at this point, I do not wish to delve into economic theories.
With the Global Residence Scheme in the background, there will surely be some more movement in the real estate market, and I am curious to see how property prices in Malta will develop in the future. If you are planning on moving to Malta, and you are interested in purchasing real estate, you should consider some basic guidelines, so that you will not pay more taxes than you have to. The office of Dr. Werner & Partner are happy to advise you in this matter.
