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Malta's 'slow burn' boom

Jaimie Kanwar

Malta continues to be an excellent investment destination.

Malta has been both a desirable lifestyle and investment destination for many years now, and whilst the package holiday market appears to have slowed slightly, the opening of newer, more stylish hotels and more incoming budget flights seem to have kept tourism increasing at a steady rate.

It also helps that Malta is an island, meaning that the amount of property available is restricted purely due to the physical size and infrastructure limits of the island.  You are certainly not likely to see the ‘super-resorts’ here that are popping up all over the world.

This fact continues to drive up property prices as buyers are not choosing from a huge amount of new property and everyone is competing for the same resale properties.

Combine this with a steady internal housing market as well as a safe and steady economy and increasing tourism figures, and I see the price of Malta property continuing to rise steadily over the coming years.

Some of the key points for Malta’s steady economic growth include:

• Low unemployment
• Relatively high GDP (and one that will continue to grow due to membership in the EU)
• Likely improvements to infrastructure from EU financial aid
• A lack of land (especially close to the sea) for development
• Agreement to explore the commercial exploitation of petroleum on the continental shelf between Malta and Tunisia
• Recent reductions in personal taxation (giving more disposable income to the islands inhabitants
• Adopted the Euro in January 2008

In a recent EC review of Malta, The EC stated that it expects to see strong economic growth continuing throughout 2008 and 2009, along with a reduction in unemployment, an improvement in public finances, and a continuing growth in domestic demand. 

The review went on to say also that the adoption of the Euro had provided 'a major stimulus to the economy' and that 'further advantages are expected to come from reductions in personal taxation and pressure for a reduction in interest rates'.

The future prospects for the Malta property market from an investor’s point of view are therefore very positive indeed.  Malta offers a very safe environment for a real estate buyer looking to achieve solid rental yields and gain steady capital growth in their property. 

As Malta is not an emerging economy, exorbitant price increases are unlikely to occur.  Instead, the appeal of the island will undoubtedly continue and, as a result, income, yields and growth all look set to rise steadily, making Malta an attractive “slow burn” investment prospect.