The heart of the Mediterranean
The small Mediterranean island offers its citizens a certain rare beauty and distinctive cultural heritage. Located in the middle of the Mediterranean Sea, the humble archipelago has a history that dates as far back as 5,000 BC when the inhabitants of neighbouring Sicily crossed the waters to settle there. They built infrastructure unlike anywhere else, and these buildings still exist today as the oldest megalithic structures known to man. In fact, Malta’s capital Valletta is a UNESCO World Heritage Site. Malta also boasts an excellent reputation, developing an effective business infrastructure over the past 15 years and positioning itself as an international business hub. Since the island nation joined the EU in 2004, its financial industry has experienced constant growth, offering a number of key advantages for business people. From a tax perspective, Malta places one of the lowest tax burdens on its residents, with the system combining corporate taxation with favourable tax credit incentives.
Throughout the last decade, the Maltese property market has experienced quicker development than many other European countries and such development is expected to continue in the years to come, making real estate “buy-to-let” investments on the island very lucrative. Both residential and commercial property markets have experienced exceptional growth and historic heights as a result of increased demand for office space and labour. The magnitude of construction of modern buildings to satisfy demand is remarkable. The popular towns of Sliema and St Julian’s have seen more apartments built this decade than in the previous years combined. Adding more supply of quality homes and commercial office space has only helped satisfy the ever increasing demand and has not resulted in a reduction of the growth of rents. An increase in rental prices was recorded particularly in the last four years. Rental prices have increased by approximately 30% in the last four years alone. If the trend for economic growth continues at its current pace, companies will need even more office space. In the prime central letting market including the harbour areas of Valletta, Ta Xbiex, Gzira, Msida, Sliema and St Julian’s the take-up of new rental tenancies keeps increasing dramatically, as a result rental prices are holding up. Other attractive villages and towns further inland, are not far behind either with demand for more traditional houses of character and modern villas in established residential neighbourhoods also very strong, particularly those with large outdoor areas including courtyards and especially those having sizable gardens and pools.
The strength of the rental market, helping landlords achieve healthy monthly returns can be attributed to the many people moving to Malta for work in various industries. From finance to IT, to maritime and aviation as well as the all-important iGaming industry, the majority of the islands jobs fall into the service sector. Ultimately more people, jobs and wealth creation has helped increase the demand for quality rental accommodation. The long lets market is also being further boosted by a number of other factors, including the Individual Investor Program (IIP) or “citizenship by investment program” which has proven to be a huge success and has attracted high net worth individuals to lease and/or buy luxury properties in Malta. Property in Malta still remains noticeably more affordable to purchase when compared to real estate in major European Cities, with the rental growth outlined above, this also means that investors will be able to achieve higher returns for their investment. Buy to let investors have been able to achieve an average yield of 5%-7% in recent years besides benefiting from the great year-on-year capital appreciation on the value of the property, which has averaged approximately 6%-7% per annum in recent years. To see how you can achieve strong monthly returns in an environment with an economy that is only likely to grow further, please get in touch with our professional team backed by unparalleled personal service to the real estate industry, where you are sure to find all the assistance you require.