The increase in advertised property prices slowed down in June after registering growth for the first time in 24 months in March, the Central Bank reported.

Although property prices maintained their upward trend between April and June, the 0.5 per cent increase was markedly lower than that registered in the first three months of the year. Between January and March, advertised prices had risen by 4.5 per cent.

According to the Central Bank’s June quarterly review published yesterday the overall increase was primarily due to higher prices for apartments and, to a lesser extent, townhouses, houses of character and villas.

Apartment prices rose by 3.6 per cent when compared to the same month last year while maisonettes dropped by 7.7 per cent.

Advertised prices for townhouses, houses of character and villas went up by 7.8 per cent but this was a far cry from the substantial increase of 21.4 per cent recorded in the March quarter.

The Central Bank said available information suggested the supply of properties coming on the market declined further in the second quarter by 7.4 per cent when compared to the same period last year. However, it also noted that the number of building permits issued by the Malta Environment and Planning Authority declined by 3.6 per cent when compared to last year.

Last month, the International Monetary Fund said the real estate market was still characterised by excess supply, insisting this was a source of concern.

In its country report, the IMF warned that Maltese banks were highly exposed to the real estate sector, echoing a similar observation made earlier by Central Bank governor Michael Bonello, who described this state of affairs as “the first and obvious challenge” facing banks.