Property in Malta Likely to Rebound in 2007

The 2007 prospects for Malta in terms of travel and tourism as well as real estate are far more positive than they were in 2006 when the island began suffering drastically from a dwindling tourism market and an oversupply of property stock.  Air Malta’s stranglehold on aviation access to Malta was damaging and yet it was almost against the government’s will that cheap flight operators like Ryanair managed to break the near monopoly on flights to Malta.

Going in to 2007 Air Malta has been forced to go head to head with Ryanair in terms of its competitiveness and apparently EasyJet are now contemplating making a move on the market from spring 2007.  As tourism numbers are set to soar again next year so the property market is due a positive correction with the likes of Knight Frank predicting over 10% growth in prices in 2007 alone.  If all this comes to pass property in Malta is likely to rebound in 2007 with a vengeance.

Malta has so many positives in its favour; it is one of the safest countries in the world, it is one of the most idyllic for retirement, the cost of living is relatively low whilst the standard of living is certainly high, English is widely spoken, there is an active long term and holiday rental market and now Malta is easily and cheaply accessible from the UK and Ireland as well as Italy and Germany.  Malta is on the Mediterranean, it has a stunning climate, crime is very low and the standards of healthcare and education are high.  The economy of Malta is robust enough for Malta to be edging towards adoption of the Euro in 2008 and politically the island is stable.

For a property investor all of these pluses mean that Malta is an attractive location to consider for investment.  The fact that 2007 is likely to be a bumper year for tourism on the island means that new people will be discovering Malta and today’s holidaymaker is very often tomorrow’s holiday or retirement home purchaser.  For developers and investors this is fantastic news and these facts are some of the strongest supporting Knight Frank’s predictions of around a 12.5% increase in property prices across Malta and neighbouring Gozo next year.

Those who buy property in Malta will know that they can cheaply and easily afford to visit it multiple times a year, those looking for a long weekend away will also be able to fly to Malta cheaply and rent out a holiday villa or apartment there.  Malta and Gozo have limited space left for properties to be constructed as they are both small islands and therefore those who get in now should have long term potential to profit - either from capital growth or from strong rental demand which will improve annual yields.

One of the negatives for an investor though is the fact that the purchase of multiple property units by non-residents is difficult without the use of various legal structures…for professional investors this is not a restriction but for the one off investor it can limit Malta’s appeal.  Having said that, one or two well located holiday apartments or villas with decent facilities and close to attractive amenities such as a spa or tennis courts or with easy beach access could return an investor an excellent yield if let out throughout the spring, summer and mild autumn to the new numbers of tourist expected to arrive with the cheap flight operators.

Another negative factor that an investor really needs to keep in mind is the fact that so much in terms of property price growth and rental yield potential is dependent on the tourism industry, and if for one reason or another Malta again loses its appeal as it did in 2006, this will affect profitability and also make a well timed and profitable market exit difficult. 

From 2005 - 2006 there were signs that Malta’s government did not perhaps respect the percentage of its economy that is so dependent on tourism annually.  Around this time the World Travel and Tourism Council predicted that government spending on the travel and tourism industry in Malta could grow by as little as 0.3% over the next 10 years and then the government seemed almost anti cheap flight operators being given access to the skies and airports of Malta and for an investor this was more than slightly concerning.  However, with the disastrous 2006 holiday season the government seems to have awakened to the possibility of a dwindling tourism economy and announced almost a 40% increase in budget allocation for tourism going in to 2007.

In addition to this, those citizens dependent on their income from travel and tourism and real estate as well took matters into their own hands in 2006 and they have shown that they too can work hard at turning things around.  This should lessen the concerns of an investor about the future prospects for tourism in Malta. 

Looking to the future, more still needs to be spent on retaining the charm and appeal that Malta has, beaches need to be kept pristine and infrastructure such as roads and pavements allowing for accessibility need to be improved.  There is no doubting the potential in Malta and 2007 will be a good year for property price growth and the promotion of the nation to a wider travel and tourism audience – but the foundations for long term profitability are a little shaky if the government doesn’t commit a little more focus and effort to keeping Malta attractive for the continued development of the tourism industry.

Special Reports: Property News for Malta

Malta Investment Property Potential
Malta's property sector offers investors a safe haven with strong rental yields and steady real estate price growth potential.

Malta Property Buying Process
The property buying process in Malta for real estate investors is sophisticated and well documented, straightforward and affordable

Malta Property Investor’s Guide:
Real estate in Malta is a property investor's paradise with short, medium and long term potential for substantial gains