It’s official. Malta is set to join the soon-to-be enlarged European Union (EU) next year, following last month’s referendum, which showed that 54 per cent of the electorate had voted in favour of accession.
Although, for many years, Malta has attracted its fair share of overseas buyers especially from the UK, the market cooled briefly in the mid-1990s, probably due to the exorbitant prices being asked for villas, old houses and many of the newly built properties.
However, things began to pick up again in the late 1990s and the market is again on a growth pattern. Figures issued recently by Malta’s Ministry of Finance show that last year 465 permits were granted to non- residents for the purchase of property worth more than LM32m (Euros 75.8m). By comparison, only 168 units worth Euros 13.2m were sold in 1997.
Like most businesses on the island, estate agents always favoured entry to the EU. Andrew Gatt, operations director of Dhalia, one of Malta’s leading estate agencies, says that since the referendum result, the island has already seen an increased level in inquiries from prospective overseas buyers. «It is a very positive sign,» he says.
Frank Salt, director of Frank Salt, Malta’s oldest estate agency, is another believer in the importance of the EU. «Malta’s identity is European…Malta needs the security of the EU,» he says.
«Although joining the EU may make no real change to the property market per se, rental values may go up once we do join. Companies may be keener to relocate here. It’s good for business.»
There are now greater incentives for foreign nationals wishing to buy. Stamp duty has been reduced from a hefty 17 per cent to 5 per cent. This godsend is beneficial not only to the foreign legions decamping on this tiny island 80 miles south of the toe of Italy, but also to the Maltese themselves.
The first-time house market has seen a massive upsurge, as young Maltese opt for their own «bricks and mortar», rather than renting or living with their parents until they get married.
Mr Salt agrees that the lower stamp duty has «opened up the marketplace» to all parties. He says sales have risen by 6-7 per cent in his agency, half of which were transacted by UK nationals.
Historically, foreign residents in Malta have only been allowed to own one property, subject to certain conditions being met. Once Malta becomes a fully-fledged member of the EU, they will be allowed to buy a second property but only once they have established five years of residency on the island and which they would be permitted to rent.
«Malta is back on the map as far as overseas buyers are concerned,» says Mr Salt. Although he admits that UK buyers dominate the market, other European nationalities have also been investing in property in Malta. «The Russians seem to have moved here en masse,» he adds.
What is the choice available to the prospective purchaser? And what financial outlay would be required? Choice would be no problem; nor the finding of a property to suit different pockets, including some deep ones.
A modern, two-three bedroom flat in one of the island’s many villages could be bought for between Euros 83,000 and Euros 101,000, rising to about Euros 200,000-Euros 213,000 in a popular area, such as Sliema or St Julians, in the north-east of the island.
Villas, depending on their location, size and amenities, come no cheaper than Euros 319,000 and often well beyond Euros 470,000 for the better appointed examples within sight and easy reach of the sea.
If a converted farmhouse is what is required, then about Euros 250,000 should secure a decently-sized property. Old houses of character, in either town or country, are always coming on to the market. As affordable as Euros 43,000 for a small two-bedroom unit in an out-of-the-way village in the south, or as pricey as Euros 330,000 and upwards for a three-bedroom house with small swimming pool in the better locations.
For the better-heeled, there are a few exclusive apartment developments which offer all the creature comforts and goodies views, amenities and security that money can buy.
One such project is the waterside Portomaso residential complex adjoining the new Hilton hotel in St Julians. Here, two-bedroom apartments with a sea view sell from about Euros 355,000, rising to Euros 615,000 for three-bedroom versions, with penthouses carrying pricetags heading skywards probably well over the Euros 2m mark.
With 300 apartments (and 15 penthouses), the Portomaso development, owned by the Tumas Group, has now been completed. «The last phase of the marketing process of Portomaso is about to commence,» says Maurice Tabone, sales director of this successful development.
As Mr Gatt emphasises, the «EU will be good for Malta». All prices have been converted from Maltese Lira.
Financial Times (London), April 16, 2003