Residential property prices fall further

The downward trend in advertised residential property prices persisted over the first quarter of 2009, with the Central Bank's property price index dropping by 9.9% on a year earlier.

The Central Bank reported in its Quarterly Review today that the index had contracted by 4.4% in the preceding quarter. Hence, at the end of March it was around 11% below the peak level reached in mid-2007.

The quarter under review also saw a reduction in the number of properties advertised, which was down by 21.1% on a year earlier, with the drop being distributed across all the categories of residential property surveyed.

Permits granted by the Malta Environment and Planning Authority were fewer during the survey period, providing further evidence of the slowdown in the property market.

In the March quarter, lower asking prices were observed in seven out of the eight property categories surveyed.

Advertised prices of finished flats, the most common type, were down by 10.8% on a year earlier; but the largest drops, of 20.4% and 16.2%, respectively, were registered by prices of flats in shell form and houses of character.

At the same time, prices of town houses were down by 11.8% on an annual basis, while those of maisonettes in shell form and of finished maisonettes were down by 5.0% and 4.4%, respectively.

On the other hand, advertised prices of terraced houses rose by 4.1%.

The Bank's quarterly property price index measures advertised residential property prices compiled on the basis of newspaper advertisements sampled each month.