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First-time buyers' scheme, IIP among factors causing strong growth in property prices

Advertised prices for residential property went up by 9.9 per cent in the first three months of this year compared to last year, the Central Bank said today, quoting its ongoing survey.

There was an increase of 10 per cent during the final quarter of 2015, and an overall growth rate of 6.3 per cent in 2015. Growth in advertised house prices has been strong since the end of 2013.

The National Statistics Office Property Price Index, which is based on actual transactions involving apartments, maisonettes and terraced houses, also grew during the period, though at a more moderate pace - with an annual growth rate of 2.6 per cent during the first quarter of 2016, roughly similar to the figure of 2.7 per cent in the final quarter of 2015. In 2015 as a whole, contract prices rose by 3.5 per cent. 
 
The bank said residential property prices in Malta are being boosted by a number of factors, including the Individual Investor Programme and the scheme to help first-time buyers.

Property demand is also being prompted by strong growth in disposable income, an increasing number of foreigners working in Malta, and low interest rates.

Property demand is also being prompted by strong growth in disposable
income in the context of a robust labour market, an increasing number of foreigners working in Malta, as well as the low interest environment.

During the first quarter of this year, the advertised prices of maisonettes and terraced houses rose by 13.6 per cent and 19.6 per cent, respectively.

Annual growth in prices for apartments remained robust at 7.8 per cent. Similarly, prices in the “other” properties category, which consists of town houses, houses of character and villas, grew by 7.7 per cent when compared with a year earlier. 

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