The construction industry showed no signs of operating in a "bubble", according to a new study.

A review of the property market by  auditing firm KPMG, released this afternoon, found there was no sign of artificial inflation in the prices of property.  

"We ran different economic models, and took the change in property [purchasing] prices against GDP, economic growth, and so on. We found that there was no sign of a bubble," said study author Mark Bamber. 

Malta Developers Association president Sandro Chetcuti, who commissioned the study, said he wanted to know the real situation in the construction sector so as "to not get carried away". 

Prime Minister Joseph Muscat, who attended the launch of the report's findings, said it dispelled myths that existed about the property market.

"I'm happy to see that this independent study has tallied with our vision and our calculations on the market facing buyers and sellers," he said. 

The affordability of buying a property had actually improved over 2013. 

However, the same could not be said for the rental market. 

Although the study did not delve into the situation facing tenants and landlords, Dr Muscat said the situation needed addressing. 

"We will be explaining the road ahead for the rental market in the upcoming budget. While we appreciate the need for return on investment, there cannot be what I believe to be abuse of the lack of legislation when it comes to issues like sudden increases in rental prices," Dr Muscat said.

He added that whatever changes were earmarked for the sector would be carried out in consultation with stakeholders, including the MDA.

Main findings:

Nearly a quarter of Maltese workers are directly or indirectly involved in the construction sector.

€1 in every €7 in the economy comes from the property market.

There was €1.2 billion gross value added in 2015 from construction.

There are 37,000 directly or indirectly employed in the sector.