Alluring Malta: one of our Top Ten Places to Buy in 2014

Wednesday, January 22, 2014

Alluring Malta: one of our Top Ten Places to Buy in 2014

The little island of Malta remains a stalwart of the lower end of our annual Top Ten Best Places to Buy Abroad and appears at number nine in 2014. Here we give you the lowdown.

It may only be 17 miles long and nine miles wide but it's got a rather healthy population of 400,000 - clearly an awful lot of people think it's a great place to live.

It's not just the Mediterranean climate, beautiful historical towns and villages - including three Unesco world heritage sites - sophisticated amenities and beaches - there's also the stable government, buoyant economy, benign tax regime and established property market.

For British buyers - a good few of whom are retirees - the ubiquitous usage of the English language is attractive, as it makes integration easier, and the Malta Retirement Programme where income is taxed at a flat rate of 15 per cent.

Property is not the cheapest in the eurozone, but the market is stable - and Malta showed positive growth in 2013 - the fourth highest price rise amongst EU states according to Eurostat (the average scenario amongst EU states was a 2.2 per cent price fall).

"We have registered a good increase in the prices of luxury apartments and houses of character [the traditional Maltese townhouses]," says Nick Bilocca of Frank Salt agency, the largest on the island.

"Prices in Special Designated Areas [zones where permanent residents can purchase (multiple) homes with the same rights as Maltese citizens] are also on the rise. "Whilst the rental return in Malta averages 3.5 per cent per annum, it rises to 5 per cent in Special Designated Areas (SDAs)."

Buyer hotspots

Many of these SDAs are close to the hub of St Julian's/Sliema, arguably Malta's major hotspot.

"The seaside area of St Julian's, with its two bays, bustling restaurants, bar and café scene and high-end hotels, continues to be a favourite with property buyers," says Ian Zammit of Malta Sotheby's International Realty.

"Sliema also remains very popular - a central location with Malta's main shopping district and easy access to Valetta."

Frank Salt concur that the urban/cosmopolitan area of Sliema/St Julian's is best for great rental returns because of its proximity to Malta's commercial hubs, Valetta/Vittoriosa are popular for the same reason, along with the availability of historic/heritage properties. In Valetta, it's possible to buy a two-bed townhouse for around €150,000.

But those seeking quieter seaside areas, Marsacala and Mellieha are popular - or St Paul's Bay in neighbouring Gozo.

"There a good deals in these lower budget areas," says Bilocca.

Go Gozo?

The smaller and greener Gozo is an easy boat ride across from Malta's west coast yet its sleepiness appeals to those seeking rural tranquillity - urban Malta can get clogged with traffic and also unbearably hot in July and August - and there are plenty of attractive stone-built farmhouses for sale.

Many of the Maltese own "holiday" homes in Gozo, and the fact that the Maltese are keen property investors themselves on both islands - Malta has one of the highest per capita property ratios in the EU - is one of the factors stabilizing the market so it is not overly dependent on foreign buyers.

Alongside British buyers, Russians buy large penthouses, the Italians are active (they're practically neighbours), plus the Scandinavians are dominant due to Malta's thriving iGaming industry, according to Sotheby's.

But what might people buy?

Whilst a retiree might pay €250,000 for a three-bed apartment in a complex in Gozo, you might may three times that for a sea-front apartment in one of the SDA developments on the urban north-coast.

At Tigne Pointe, one of the landmark mixed-use developments, two-bed luxury apartments cost from €350,000; whilst at the neighbouring Fort Cambridge, prices start from €222,000. But you'll pay considerably less for a resale apartment that predates these new luxury schemes: even in Sliema you can get a two-bed apartment for a little over €100,000.

For houses of character, in villages or towns, you'll pay a premium as they are of limited supply - entry level is around €50,000 for an unconverted one, but €200,000 is an average for a renovated home.

Looking ahead, Valetta has been named European City of Culture for 2018 and healthy tourism is good news for rental returns.

"The Maltese market looks to stay buoyant with the population increasing year on year and a relatively small area for development," says Mr Zammit of Sotheby's. 

Search here for properties for sale in Malta.


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