Property price inflation moderates again
The Central Bank of Malta has reported that property price inflation has moderated again after having risen since March 2009.
The Bank said in the Quarterly Review, published today, that the annual rate of change in advertised property prices, which in the March quarter had risen above zero for the first time since 2008, remained in positive territory during the second quarter of 2010, but the growth rate moderated to 0.5% from 4.5% three months earlier.
The overall increase was primarily due to higher prices for apartments and, to a lesser extent, for townhouses, houses of character and villas.
During the June quarter, prices of apartments – which make up slightly more than half of properties surveyed – rose by 3.6% on a year earlier, contributing almost 1.5 percentage points to overall property price inflation.
Prices of maisonettes dropped by 7.7% on a year earlier, accounting for around a negative 1.5 percentage points in overall property price inflation, while prices of terraced houses remained unchanged.
The bank said the supply of properties coming onto the market declined further in the second quarter of 2010, when the number of properties advertised for sale contracted by 7.4% on a year earlier, compared with a 1.3% decline in the March quarter.
The number of building permits issued by the Malta Environment and Planning Authority declined by 3.6% year-on-year, following a drop of almost two-fifths in the previous quarter.
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Paul Smith
Nov 30th 2010, 15:43
Cassar,you dont understand what you are talking about. Property in Malta is in for a big dive
Think of all those europeans that wont be coming now to buy over priced property because they are skint. Secondly your knowledge on the UK economy would have trouble fitting on the back of a postage stamp. Malta's exports next to nothing apart from semi conductors built by a foreign firm.
You better hope the debt crisis in Europe fades or that will be another nail in Malta's coffin as people stay home for there vacations. Your economy is about as robust as the rest of us.
Besides, what's good about higher and higher property prices? It hurts your tiny economy!
I forgot though, you are a VI
(i dont own my own home - I rent - why pay the bank dead money in the form of interest when you can save and be a cash buyer)?
C Cassar
Nov 30th 2010, 17:13
"Property in Malta is in for a big dive", yes, bla, bla, bla - you've been saying this for at least 2-3 years and it hasn't happened. Now that it's official that the Maltese economy is doing very well, your statement has even less credibility. I've sold 2 apartments in the last year, both have sold within 4 weeks and reached their asking prices within 3%. Of course these have been quality properties and like in any market with a healthy economy, these shift relatively easily. You clearly have never owned any property in Malta or more probably you've lost a bag load on one in the UK where it certainly has slumped, combined with the terrible economy over there.
Alan Watson
Nov 30th 2010, 14:01
Welcome to the real world! For over two years I have regularly warned through these pages that the Maltese property market had two major faults:
1. Prices were unrealistically high
2. There is too large a building programme.
There has to be a re-allignment at some time. The Maltese must concentrate on re-furbishment of property and not new build. Plus, those families with second, or even third homes, must realise that they may not be the cash cow they once thought and, if they are to release them on to the market, then do so at an appropriate price.
Protect what unspoilt land you have and strictly control new build, there are many properties, when one drives around Malta, in need of a little TLC in order to make either a fine home for the Maltese or, hopefully, an affordable home for someone like me who would love to retire there!
tony abdilla
Nov 30th 2010, 12:14
Statistics on advertised prices is a useless statistic. Why can't the central bank publish statistics on sale prices. That will certainly make more sense on the property market in Malta. We all know that property prices have come down, but they are not down enough when compared to what is hapening elsewhere in Europe.
C Cassar
Nov 30th 2010, 14:29
Depends on where and what you buy in Malta like anywhere else. The UK has been particularly hit because the economy has been so bad there. Malta on the other hand hasn't been hit by the downturn and is one of the more robust economies in Europe just as is Germany where prices haven't been hit at all.
Prices for quality (and I emphasise quality) properties in Malta certainly haven't gone down at all, their rate of increase has gone down for sure but now it's back on an upward trend. For these properties the annual rate of inflation went down but they still rose each year, even over the last 2 years.
H Bonnici
Nov 30th 2010, 20:42
@ Tony Abdilla.
As I said in another article, doing cross-country comparisons in real estate markets is pretty much useless because first of all you would have to understand what is really going on in your country!
Here in Malta, contractors are the only people who are able/forced to lower some of their low-end real estate prices in order to sustain a proper turnover. This would allow them to build new properties and place them on the market. Then there are private owners. Unlike contractors, private owners (especially the ones who bought property during the past 6 years) cannot afford to lower their property because these are not willing to lose money that they originally spent (and rightly so)!! On the other hand, most prospective buyers are holding off from buying with the hope that the said 'bubble' bursts.
Bottom-line: The 'bubble' here in Malta has already burst with prices largely stabilised and won't come down as happened in other countries!!
Obviously, this is my humble opinion. Nonetheless, understanding the dynamics which form a wider part of a country's economy is extremely difficult to examine in depth given all the variables that might come into play!
A Attard
Nov 30th 2010, 11:47
The prices should decline to at least 20 to 30 % lower and the governing body should make ways, legislate to help in that direction.
It is not healthy to put all this stress on new couples.
All these empty buildings are a wasted resource for general citizen.
Joe Bartolo
Nov 30th 2010, 20:38
Try to explain that to couples/private owners who bought during the last 10 years and who are trying to sell their property without loosing money. You cannot legislate something sensitive like this cause you cannot obligate people to loose money from their investment. If people want to buy property, they will have to work hard to get something appropriate (just like everybody else does after all)
w. caruana
Nov 30th 2010, 10:11
These statistics are on the prices advertised and not the sale of properties. Everybody knows prices have gone down...nowadays one can buy a fully finished 3 bedroom apartment in the south of Malta for € 70... my guess is they will keep on going down as the supply is much much higher then the demand.
A Camilleri
Nov 30th 2010, 20:31
Dream on Caruana!! What kind of guess is that??? You cannot speculate by using simple economic principles to Maltese property! The only properties that went a bit down are those owned by contractors which have been freshly built and which are very low-end!! This is done so that they can keep a healthy turnover. You can simply forget it that private owners who spent their fortunes on their properties (especially those who bought during the last 5-7 yrs) to sell at a lower price....just forget that!! If you want to buy real and genuine property, you must work really hard !!