The global financial crisis, which saw interest rates plunge to historic lows, has contributed to making housing in Malta the most affordable in decades.

A study by architectural firm DHI Periti says that average Maltese households only started to afford their own three-bedroom residence in 2009.

“This was a good period for buyers, as property had never been so affordable over the past 32 years, thanks to the global crunch,” report author Denis Camilleri told Times of Malta.

The study looks at the Housing Affordability Index between 1982 and 2014, which compares the monthly mortgage payments required for two and three-bedroom properties with the median monthly family income.

The report notes that another major factor, apart from interest rates, which made houses more affordable was a decrease in the accommodation floor area. While in 1982 a three-bedroom residence had an average area of 135 square metres, by 2014 this had shrunk to 105 square metres.

In terms of recommended prices for buyers, the report bases its estimates on the price-earnings ratio.

According to this model, prospective buyers should look for a price-earnings ratio of 4:5. This would mean that a family whose yearly income is €22,225 should look at properties with a €100,000 price tag.

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