Malta Real Estate Investment

With over 300 days of sunshine a year, the deep, blue Mediterranean Sea, a rich history, vibrant nightlife, and English spoken by most of the locals, Malta has been an understandable holiday destination for countless visitors for many decades. However, over the past 15 years or so, Malta started to evolve into more than a summer getaway, with many people looking at Malta as their potential new home and/or place of business. 

Why Invest in Real Estate in Malta?

A Safe Investment

While by no means perfect, Malta is a politically stable and secure country, with an economy that has shown consistent growth – 8.1% for 2022 and real GDP growth remained strong at 6.1% in 2023*. It is even more evident since joining the EU in 2004 and adopting the Euro in 2008, further increasing its appeal.

With homeownership at 80% – 17.9% of which are second-time buyers – it’s clear that most people consider real estate investment in this Mediterranean archipelago to be a sound and wise one. In fact, aside from a temporary slow-down during 2020 due to the onset of the global pandemic, the property market seems to grow exponentially every year. Even buy-to-let properties have a very attractive 4-7% return on investment. 

Becoming part of the EU

Thanks to Malta’s Citizenship by Investment Program, also known as the Golden Visa scheme, non-EU citizens with the financial means can invest their way to Maltese citizenship, and by extension, EU citizenship, which grants them access to living and/or conducting business in some of the most lucrative countries in the world. Even if one chooses Malta to be his/her permanent base, international connectivity is excellent, with flights to most European and North African capitals being frequent and cheap.

The Mediterranean Island Life

Aside from the aforementioned warm climate, beautiful seascapes, multilingualism (aside from the official Maltese and English, many locals can also speak proficient Italian), and endless activities to keep one entertained, the growing multiculturalism has led to a magnificent gastronomic culture, with a plethora of cuisines from all over the world available in countless restaurants throughout the island nation. The hospitality industry is certainly not lacking either, with abundant accommodation in all its forms available in almost every town and village, ideal for visiting friends and relatives. Lastly, it should come as no surprise that Malta’s waters are considered some of the world’s best for sailing and scuba-diving, the latter of which is only enhanced by the many shipwrecks around the archipelago.

Financial incentives

In recent years, real estate, food, utilities, and household goods have become comparable to the rest of Europe in terms of cost. However, there are certain aspects of life which are substantially cheaper than many neighbouring countries, which help to make Malta an attractive option for those looking to lower their cost of living. These include the Malta Retirement Programme, created purposely to encourage foreign pensioners to retire in Malta, the national healthcare system, free education at all levels, and cheap public transport (the latter of which is part of an ongoing effort to reduce traffic congestion, one of the most common gripes amongst Maltese and foreign nationals alike). Given its size, there are no long journeys in Malta, which keeps car fuel costs relatively low, despite the traffic. Taxation rates are purposely generous, an incentive devised by the Maltese government to attract foreign investment, both private and commercial, which is a major reason for the large number of foreign start-ups, along with the archipelago’s strategic location, which facilitates transhipment and distribution, and a sophisticated technological infrastructure. 

The selection process

The experience of investing in real estate in Malta can vary widely depending on the kind of property one is looking for, the area of Malta or Gozo one desires to purchase property in, the resident status of the buyer, and her/his budget. These are some points worth bearing in mind:

• Private vs commercial investment – the latter usually requires less capital, and could be a good option for those with a small budget, until enough money is raised to purchase a domestic property.
• First-time buyer vs second-time investment – the former should be less of a search for the perfect property and more of an exploratory one. This is when prospective buyers should focus on learning the market – such as affordability and resale value –  as well as themselves, exploring what features they desire more in a home, what kind of neighbourhood best suits their personality and lifestyle, and their ultimate goal. In some cases, for instance, it might make more sense for a first-time investment to be in multiple small units within the intended budget for a greater return. 
• Budgets and bank loans – it’s important to note that these factors are partly dependent on external entities, which help determine the parameters of one’s search based on income, age, job type, health status, resident status, and family dynamics. 
• Private property type – substantial thought should be given to what kind of home one is seeking. Malta offers a variety of homes, including apartments, maisonettes, villas, houses of character, terraced houses, townhouses, bungalows, farmhouses, and palazzinos. Each one comes with its own set of perks and challenges. Needless to say, prices also differ greatly between each of these property types, as well as their return potential.
• Location – this is one of the most crucial factors to consider, as it’s heavily dependent not only on budget, but also on personality and lifestyle, as alluded to above. For instance, those seeking fast-paced city life with optimal socialising and business opportunities are probably best suited to the likes of Sliema, St Julian’s, and Gzira, while those seeking quieter, more rural areas would likely prefer Zebbug, Rabat, or the sister island of Gozo. Valletta and Mdina, the current and former capitals respectively, are ideal for those seeking a happy medium in a more traditional setting. It’s important to note that one’s area options are also dependent on resident status. Specially Designated Areas (SDAs) are some of the only restriction-free areas one can purchase property in. Typically situated in prime locations and boasting luxury homes with highly desirable amenities, this is by no means a bad deal for anybody. 
• Post-purchase decisions – the importance of making the right decisions when it comes to modifying a newly purchased property cannot be overstated. Acquiring quality materials and workmanship while respecting one’s new neighbours and maintaining legal compliance with the Planning Authority will all pay off in the long run, in terms of long-term maintenance, resale value, and peace of mind.

Contact Excel Homes today to get in touch with one of our many qualified agents to help get you started on the process of investing in Maltese real estate. 

References

*https://economy-finance.ec.europa.eu/economic-surveillance-eu-economies/malta/economic-forecast-malta_en