Property prices are still going up – but no longer at the dizzying pace seen at the end of 2015.

The Central Bank of Malta’s quarterly review published on Tuesday said that the Property Price Index computed by the National Statistics Office showed that prices increased at the more moderate rate of 4.1 per cent during the last quarter of 2017, after rising by 4.8 per cent in the third quarter.

The index is based on actual transactions involving apartments, maisonettes and terraced houses.

In the quarter under review, the rate of increase was slightly lower than that registered in the eurozone, which stood at 4.2 per cent.

"Residential property prices are being supported by numerous factors, including the low interest rate environment that makes property more attractive as an investment as well as the government’s scheme for first-time buyers," the review says.

"Demand for residential property also continues to benefit from favourable labour market conditions and an increase in foreign workers.

"The Individual Investor Programme has also contributed, although its impact has been limited in extent and to the high-end segment of the market. The strong increase registered in residential permits in the last year should take off some of the upward pressures, as new construction activity counters excess demand for property," it concluded.

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