Mortar and bricks have always been a solid investment in Malta, even more so since 2008 when the global recession dug in, and even though property prices went down, the drop was marginal and the market was already on the mend by the end of 2010 and saw a positive increase in 2011. Price stability continued through 2012 and 2013, and has been on the rise ever since.
The influx of foreign nationals moving to Malta, be it to retire, relocate or to work here, has also paved the way for a golden opportunity – rental investment. The growth of niche industries such as gaming, pharmaceuticals, back-end office operations and financial services has led to a strong surge in demand for rental properties. Local demand has also become a factor with many breaking tradition and opting to rent property ahead of purchasing.
For these reasons, property has been a smart investment choice in Malta, appreciating in the long term, whilst providing a steady income in the form of rental payments in the short term. Factor in the excellent choice of good value property available and attractive interest rates on home loans, and surely the recipe for a solid investment cannot be more fool-proof.
What kind of rental return can one expect? At present this is estimated at between 3.5% to 6% per annum for residential property and 5% to 8% on commercial property. It very much depends on the type of property in question, the location and more importantly the level of finishing and furnishing.
One final aspect to keep in mind when considering a rental investment is that whilst the loan repayment is likely to remain constant over time, inflation and the cost of living are likely to keep rising and population growth and demand for property from overseas will continue. This ultimately drives up rents, especially if supply cannot keep up with demand – which is what Malta is experiencing.