For many years the Maltese rental market was constrained by rental regulations. In the years prior to 1995, the Maltese property market experienced excess property demand. This forced owners to rent their vacant property at below market prices or sell their property. Many landlords have followed the second course of action, resulting in a stronger tendency for landlords to sell their property rather than rent it.
It was only when the market was liberalized in 1995 that rental prices began to rise, with the lessor and the lessee being able to negotiate and therefore influence the price of the rented property.
The rental price developments that have prevailed in this liberalized market since 2013 are captured by the rental housing price index. This Index represents the fruits of Grant Thornton’s collaboration with the real estate agency Dhalia. It is the only publicly available source of rental price information covering more than five years.
Over a seven-year period to 2019, rental prices increased by 60%. To put things in perspective, a property rented at €500 per month in the 1st half of 2013 would be rented at €800 in the 2nd half of 2019. During this period, especially in 2016, a huge wave of foreigners moved in in Malta to look for a job. They mainly sought temporary residences and/or long-term rentals, contributing to the growth of the Index.
The index should recover further
The impact of COVID-19 on rental market prices is evident. Before the pandemic, the rental price index peaked at 160 in the second half of 2019, followed by a steady decline until the first half of 2021 when the index fell to 134, representing a decline of 16%. It was the result of the nationwide lockdown and subsequent restrictions that were brought on by the pandemic. In the second half of 2021, rental prices started to recover. Six months later, rental prices were still 10% below pre-COVID-19 levels.
Overall, the index should continue to recover in line with general economic growth. In fact, more recent data covering May and June 2022 shows that rental prices have continued to rise.
Kristina Pisani, Economic Advisor at Grant Thornton
The ‘Malta property landscape: a true picture’ is a bi-annual publication bringing together Dhalia’s high-quality property market data and Grant Thornton’s analytical expertise. The report provides in-depth analysis and timely information on developments in the Maltese property market to enable policy makers, businesses and property investors to make informed choices. For more information on the report, please visit https://www.grantthornton.com.mt/malta-property-landscape
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