Since 2013 the market value of villas and farmhouses has soared by almost 50%, while the average price of an apartment has increased to €228,000.
These trends have emerged from a property market analysis carried out by KPMG on behalf of the Malta Developers Association. The study was based on some 80,000 entries from major real estate agents comprising 11 types of properties between 2011 and 2016.
The highest increase was registered in the prices of villas with a 44% rise in the three-year period between 2013 and 2016. During this time the average price increased from €1.1 million to €1.59 million.
The second highest increase was registered for farmhouses with 40%, meaning that last year such properties was being sold at an average of €1.07 million. The cost was also influenced by the structural condition and the size of land surrounding it, with rural areas commanding a premium.
READ: Government brochure reveals Malta's rental rates
As for houses of character, the average price rose by 37% to €498,000 in 2016.
In the case of apartments, which made up nearly half of all the entries, the average price increased from €195,000 in 2013 to €228,000 in 2016. The vast majority are priced between €100,000 and €200,000, though a small niche market has emerged for luxurious apartments worth over €900,000.
However, a shortage of supply in areas like Sliema, St Julian’s and Attard, means that in these localities prices are significantly higher.
Garage space increases the value by a further 35%
From this analysis it transpired that maisonette prices were relatively stable with the average price increasing by 14%, meaning that the average price in 2016 was of €197,000.
OPINION: These rent laws are simply unjust
The popularity that penthouses have gained in recent years is reflected in the fact that between 2013 and 2016 average prices rose by 31% from €275,000 to €361,000. Moreover, there is a growing supply of penthouses priced over €900,000.
Going up the scale, the next in line are terraced houses with the average price in 2016 being €374,000 – a 16% increase over 2013.
The study also analysed other characteristics which influence property prices. It transpired that those located along the seafront commanded an added premium of 68% in the north, 57% in the harbour area, and 44% in the south.
Another feature which gives added value to a property is a garage space, especially in areas where there is an acute shortage of parking. According to the report this increases the value by a further 35%.
What about rent rates?
Mostly driven by expats, rent rates have soared in recent years. The lack of supply in certain areas like Sliema and St Julian’s has also led to a bidding war between potential tenants, fuelling a sharp rise in prices.
In the case of apartments rates have increased between 45 and 49 per cent across the board, between 2013 and 2016.
However, when it comes to penthouses the increase was most pronounced in the Grand Harbour area with 59%, over the same three-year period.
The report warns that inflation in the rental market should be monitored as a shortage of affordable properties would negatively impact low-income households.
Furthermore, rising rental rates will also be problematic for expatriate workers in low-paid occupations who must find permanent accommodation from day one of their arrival.
Other interesting trends
■ Palazzos are the most expensive property type, selling at an average €3.48 million.
■ Maisonettes and apartments are the most common type of properties on the market.
■ The maximum asking price for an apartment was in the region of €5.8 million and for a maisonette, €1.9 million.
■ The most expensive properties are in the northern harbour region (including Sliema, St Julian’s, Swieqi, Msida, Kappara) while the cheapest are those in the south.
■ The highest concentration of apartments and penthouses is in the northern harbour region where such properties make up 80% of the market.
■ Gozo has the highest concentration of houses of character, townhouses, terraced houses and farmhouses for sale.
■ The highest number of villas, bungalows and palazzos for sale is found in the central region.
■ Tigné and Portomaso commanded the highest property prices.
■ Property in Gozo seems to be bucking the trend as there are indications that prices have fallen in recent years, with the average price per square metre falling from €2,000 in 2014 to €1,720 in 2016.
The price of property per square metre according to region in 2016
North Harbour - over €2,600
South - over €1,260
Northwest - €1,500 - €1,600
Grand Harbour - €2,000
Gozo - €1,720