Fall in advertised property prices

Advertised property prices fell on an annual basis by two per cent in the fourth quarter of last year, following three quarters of persistent growth, the Central Bank said yesterday.

This resulted from the findings of a survey indicated the decline was mostly on account of declining apartment prices.

For 2010 as a whole, the bank’s index increased at an average rate of 1.1per cent, following a drop of five per cent in 2009.

“Although the decline was spread across most housing categories, the most significant drop in prices during the quarter was for apartments and, to a lesser extent, for terraced houses,” the bank said.

Prices of apartments, which make up almost three-fifths of advertised properties, saw a decline of 0.8 per cent. This drop contributed around 1.1 percentage points to the overall decrease during the quarter. Over the year as a whole, apartment prices were 2.6 per cent higher than in 2009.

Prices in the “other” category, which consists of townhouses, houses of character and villas, fell by 13 per cent largely as a result of a reduction in asking prices for villas. Consequently, the category contributed 0.8 points to the total drop.

In contrast, prices of maisonettes gained 0.4 per cent, softening the drop in overall property price inflation by 0.4 percentage points.

The number of advertised properties contracted by 12.4 per cent on a year earlier in the December quarter, compared with a one per cent decline in the September quarter.

For the year as a whole, the number of advertised properties declined by 5.9 per cent.

The number of building permits issued by the Malta Environment and Planning Authority shrunk by 22.4 per cent year-on-year in the December quarter, following an increase of 4.3 per cent in the previous quarter.

This was mostly due to a lower number of permits issued for apartments (which make up over four-fifths of the total issued) and maisonettes, both of which fell by around a quarter.

In 2010, the number of issued permits was 16.1 per cent smaller than in 2009.