I am just back from a trip to Malta finding my next place to rent. Whilst I was out there I noticed a couple of things:
* Huge amounts of Shellform prorty out there. You can buy the appartment as a shell and finish it with fixtures and furnishing.
* Last 5 years have seen 10,000 - 11,000 properties being build each year. For an island with a population of only 400,000 this is staggering. This would equate to building 1.5 million homes per year in the UK or 1.1million homes per year in spain. There is such a chronic over supply that 1 in 4 homes is empty.
* Prices of shell houses are dropping at a rate of 9.5% per year.
* Rental yields on long term lets are between 2-3% of capital values.
Full Version: Malta Chronic Oversupply Falling Prices
I have visited Malta but didn't like it much myself.Sounds like there will be some rich pickings for those who do though.
P.S - Had a great Holiday Romance with a girl i met there though!
P.S - Had a great Holiday Romance with a girl i met there though!
Looks like 1 in 5 houses is empty in Malta and 1 and 3 in gozo all year round.
http://www.maltatoday.com.mt/2008/03/09/n4.html
Interesting article in Maltatoday on the 10th of march.
Looks like 1 in 5 houses is empty in Malta and 1 and 3 in gozo all year round.
An ancient rent law allowed tenants to pay peanuts in rent (€200 a year) and rental increases only once every 20 years. Tenatnts are able to pass the rental property down to others in the family. The rents are that low that no maintenance is done on the property by landlords. This only applied to property with pre 1995 rental agreements. 76% of rented property is rented out for peanuts. The frustration with the law has lead to a lot of prperty not being let out and left empty, this applies to both pre 1995 and post 1995 buildings.
Political parties do not want to change this law as their party headquarters in Valetta do benefit from these ultra low rents.
In my opinion a sudden change towards market rates could see a high levels of rental inflation and a flood of empty pre 1995 properties hitting the rental market. This would be bad news for current post 1995 property owners as it could drive down rents and increase vacancy rates further.
However this change does need to happen for the property market to function normally. I wonder how many foreign investors know about this.
http://www.maltatoday.com.mt/2008/03/09/n4.html
Interesting article in Maltatoday on the 10th of march.
Looks like 1 in 5 houses is empty in Malta and 1 and 3 in gozo all year round.
An ancient rent law allowed tenants to pay peanuts in rent (€200 a year) and rental increases only once every 20 years. Tenatnts are able to pass the rental property down to others in the family. The rents are that low that no maintenance is done on the property by landlords. This only applied to property with pre 1995 rental agreements. 76% of rented property is rented out for peanuts. The frustration with the law has lead to a lot of prperty not being let out and left empty, this applies to both pre 1995 and post 1995 buildings.
Political parties do not want to change this law as their party headquarters in Valetta do benefit from these ultra low rents.
QUOTE
Micovic says she expects any future government to recognise the unfairness of the rent laws. She surely speaks from experience: even the Malta Labour Party club and the Valletta palace housing the Ministry for Investments and IT occupy their property and pay a pittance for rent. The MLP pays them lm80 yearly; Palazzo Verdelin is a miserable Lm800
In my opinion a sudden change towards market rates could see a high levels of rental inflation and a flood of empty pre 1995 properties hitting the rental market. This would be bad news for current post 1995 property owners as it could drive down rents and increase vacancy rates further.
However this change does need to happen for the property market to function normally. I wonder how many foreign investors know about this.
I also have been to Malta and had a romance with a girl there. I married her (30 years ago) in Mosta Dome.
Malta seems to be a place that you either love or hate, the immigrant population is very small due to strict laws of residence. Malta is a very expensive place to buy, even more so than the UK, because with its 'mere' 400,000 population it is the most crowded place in Europe. In the past houses were homes for big families (very Roman Catholic country). Now children aspire for their own property and demand is always high. So why the empty properties? The rental market is biassed towards the tenant so that it is better to do an unofficial deal - what tenant? means an 'empty' house. Then again many of these properties will be Summer residences because it is the Mediterranean habit to have a second place by the sea. Believe me "chronic oversupply and falling prices" is way wide of the mark. If it wasn't then I could buy there.
'Shellform' is just the traditional way of producing property there; you get to finish it to your own taste. When I first went there some towns didn't exist and the population was 300,000, the only reason that it hasn't doubled is because of emigration and these are also people (having maintained Maltese or joint nationality) who now have 'holiday homes' on the island.
Ghawdex (Gozo) is prime holiday home territory. At heart, Gozitans do not consider themselves Maltese. How many of the empty properties are uninhabitable/illegal?
In short "caveat emptor"; and this tiny country (Malta: 25 x 8 miles) has no place on this forum in my experienced opinion.
Malta seems to be a place that you either love or hate, the immigrant population is very small due to strict laws of residence. Malta is a very expensive place to buy, even more so than the UK, because with its 'mere' 400,000 population it is the most crowded place in Europe. In the past houses were homes for big families (very Roman Catholic country). Now children aspire for their own property and demand is always high. So why the empty properties? The rental market is biassed towards the tenant so that it is better to do an unofficial deal - what tenant? means an 'empty' house. Then again many of these properties will be Summer residences because it is the Mediterranean habit to have a second place by the sea. Believe me "chronic oversupply and falling prices" is way wide of the mark. If it wasn't then I could buy there.
'Shellform' is just the traditional way of producing property there; you get to finish it to your own taste. When I first went there some towns didn't exist and the population was 300,000, the only reason that it hasn't doubled is because of emigration and these are also people (having maintained Maltese or joint nationality) who now have 'holiday homes' on the island.
Ghawdex (Gozo) is prime holiday home territory. At heart, Gozitans do not consider themselves Maltese. How many of the empty properties are uninhabitable/illegal?
In short "caveat emptor"; and this tiny country (Malta: 25 x 8 miles) has no place on this forum in my experienced opinion.
QUOTE (Lionarm @ Mar 18 2008, 08:39 PM) 
I also have been to Malta and had a romance with a girl there. I married her (30 years ago) in Mosta Dome.
Malta seems to be a place that you either love or hate, the immigrant population is very small due to strict laws of residence. Malta is a very expensive place to buy, even more so than the UK, because with its 'mere' 400,000 population it is the most crowded place in Europe. In the past houses were homes for big families (very Roman Catholic country). Now children aspire for their own property and demand is always high. So why the empty properties? The rental market is biassed towards the tenant so that it is better to do an unofficial deal - what tenant? means an 'empty' house. Then again many of these properties will be Summer residences because it is the Mediterranean habit to have a second place by the sea. Believe me "chronic oversupply and falling prices" is way wide of the mark. If it wasn't then I could buy there.
'Shellform' is just the traditional way of producing property there; you get to finish it to your own taste. When I first went there some towns didn't exist and the population was 300,000, the only reason that it hasn't doubled is because of emigration and these are also people (having maintained Maltese or joint nationality) who now have 'holiday homes' on the island.
Ghawdex (Gozo) is prime holiday home territory. At heart, Gozitans do not consider themselves Maltese. How many of the empty properties are uninhabitable/illegal?
In short "caveat emptor"; and this tiny country (Malta: 25 x 8 miles) has no place on this forum in my experienced opinion.
Malta seems to be a place that you either love or hate, the immigrant population is very small due to strict laws of residence. Malta is a very expensive place to buy, even more so than the UK, because with its 'mere' 400,000 population it is the most crowded place in Europe. In the past houses were homes for big families (very Roman Catholic country). Now children aspire for their own property and demand is always high. So why the empty properties? The rental market is biassed towards the tenant so that it is better to do an unofficial deal - what tenant? means an 'empty' house. Then again many of these properties will be Summer residences because it is the Mediterranean habit to have a second place by the sea. Believe me "chronic oversupply and falling prices" is way wide of the mark. If it wasn't then I could buy there.
'Shellform' is just the traditional way of producing property there; you get to finish it to your own taste. When I first went there some towns didn't exist and the population was 300,000, the only reason that it hasn't doubled is because of emigration and these are also people (having maintained Maltese or joint nationality) who now have 'holiday homes' on the island.
Ghawdex (Gozo) is prime holiday home territory. At heart, Gozitans do not consider themselves Maltese. How many of the empty properties are uninhabitable/illegal?
In short "caveat emptor"; and this tiny country (Malta: 25 x 8 miles) has no place on this forum in my experienced opinion.
I am renting myself in Malta and found plenty of property for rent at 2-3% yields against the property price. These yields are unsustainable. I am not even talking about the pre 1995 rule which effectively gives people property at 0.5% yield. Economics tells me "unsustainable"
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