Malta has become more popular since it joined the EU and the fact that English is an official language is a huge benefit to most. Malta is a tiny island with an area of 316 km² and a population: 441,660 meaning 1,380 people per km². For reference, UK 281 people/km², Germany people/km², Italy 206 people/km², Spain 94 people/km².
The property prices have increased on average by around 78.45% over the last 10 years. The salaries, however, have stayed almost the same. In Malta, they used to say “rent money is dead money”. However, a lot of nationals have been priced out of purchasing their own dream home. This means that when they want to move out of the family nest, renting may be the only option. Then creating a snowball effect, it’s difficult for many to save the deposit while renting, which helps to contribute to high rent.
Before there were families relocating to Malta and they would afford to rent an apartment with 1 or 2 salaries coming in. Now a lot of younger, single people are coming to Malta for sun, sea, and adventure. It is more common for 3 or more friends to share an apartment, meaning they can afford higher rent between them.
The rise of Airbnb and short-term property lets have removed some of the long-term options. These days it is so easy to create an online listing and advertise a property as a vacation home. Tourists are happy to be self-catering as most restaurants are reasonably priced. The landlords are also happy because they are getting at least 100% more.
There has been a rise in foreign businesses relocating to Malta. iGaming being the industry mostly blamed for this with over 200 companies registered in Malta in the last 10 years. For reference, the average customer service job in Malta will pay about €15,500 whereas in iGaming, one could expect to earn €30,000+ plus benefits.
Some properties are left vacant for a large proportion of the year because they are bought as holiday homes and are often only occupied by the owner and their family/friends. These are bought by foreigners and nationals alike. Who can blame them, after all, Malta is a tourist-friendly safe environment with a great climate and based in the Mediterranean.
It’s no secret that in the past, many landlords were not paying anything to the government from their rental income and there were seemingly no consequences. Then on the 1st of January 2014, the government reduced the amount of tax due starting from 15%. That was followed by a warning that tax evasion will be followed up and evaders will be taken to court. This led to a lot more landlords ensuring more rent was collected to cover the tax.
Rental contracts have changed, in the past, it was common that when the initial contract finished the payments would stay the same. These days 6-month contracts have seen a rise with the idea that the rent can be increased when the new contract begins. This became such a problem the government had to step in and limit the rent increase to 5% per annum. Limitations have also been added to rental contract lengths meaning for non-tourist 12 months is the minimum from 1st January 2020.
The properties in Malta are changing. In the past it was common to find large properties with roof access, multiple balconies, and yards. These days tower blocks are being built with only a balcony. This has led to an increase in prices for properties that have these outdoor areas. The idea of sitting out in the sun working on that tan at home is becoming a thing of the past for the average person, but then the beach is never far away.
When a property goes into probate it can end up being left unoccupied for years. Falling apart and illegal to use in some circumstances. That’s why you can often see properties around Malta just falling apart knowing that it’s still worth a fortune.
So we all know that all countries have these sorts of issues however because Malta is so small the impact is felt so much more. There are thousands of properties being developed all over the island, this will start having an impact within the next year or two. The question is will there be too many properties? Will the law of supply and demand bring the rental market to its knees?
