There is a strong demand for luxury real estate in Malta due to the islands limited space combined with its strong economy and government incentives. Due to its location between North Africa and Sicily, the nation has drawn fortune seekers and conquerors to its shores throughout history. Malta has been used as a stepping stone for expansion from civilisations as diverse as the Greeks, Phoenicians, Romans, and British.
The economy of Malta has been transformed since it gained independence from the British in 1964. It has grown even more since 2004 when it became part of the European Union.
Since joining the EU, property prices have increased sharply, greatly assisted by government incentives and a strong economy. The country has consistently posted year on year growth.
Malta’s house price index rose nearly 80% between 2000 and 2007; this figure is 53% when adjusted for inflation. Prices were rockier between the financial crises of 2009-2013, but have gone on to progressively increase.
One key issue remains supply. The island of Malta covers just 320 square kilometres making it the world’s 10th smallest nation. It comes in behind the Vatican City and Monaco and is one fifth the size of London. As a result, there is limited areas for the development of new luxury real estate in Malta.
Some of the biggest projects are the development of Saint Julian and Sliema and include a number of skyscrapers. These projects have completion dates into 2020 and the capital Valletta remains highly desirable.
To counter the limited space available for development the government has launched several measures to help ease the pressure. These include tax incentives for clients who buy properties in certain urban conservation areas, and those looking to reuse and rejuvenate designated properties. Stamp duty is usually charged at 5 per cent of the sale price, but buyers in these designated areas pay only half of this.
Certain parts of the island also have a special status attached to their new developments. This means that property can be bought by EU and non-EU nationals as if they had the same rights as citizens of Malta.
The government has also launched the Malta Individual Investor Programme, which is used to target non-EU buyers specifically. This scheme has helped boost rental and sales of luxury property in Malta and provides a steady income for the island. Tourists are plentiful throughout the year and this helps strengthen rental yields which are around a gross rate of 4.4 per cent.
The only thing that really restrains the development of luxury real estate in Malta is the issue of space. This is creating excellent opportunities for investment, however. While space can limit development, it also has the positive effect of pushing up current property prices.
Visit Welcome Center Malta today and view available luxury properties for sale in Malta. They can guide you through the entire process from finding great opportunities until completion of the sale.