A long‐term analysis of housing affordability in Malta

Denis Camilleri
  • International Journal of Housing Markets and Analysis, March 2011, Emerald
  • DOI: 10.1108/17538271111111820

A long‐term analysis of housing affordability in Malta

Photo by Wolfgang Rottmann on Unsplash

Photo by Wolfgang Rottmann on Unsplash

What is it about?

The paper aims at analyzing trends and principal causes of developments in‐house prices in Malta over the past 26 years, with a specific focus on the issue of affordability. This focusing on the strong demand for home ownership and interest from foreign buyers, supply availability together with its relationship to the high vacancy rate existing. Also delved into include the distortions in the rental market, sustainable housing measures, housing densities and high‐rise developments. Finally, noted is the implication on the use of housing as an investment asset in relation to trading on Malta's Stock Exchange. A long‐term approach has been utilized to arrive at deductions. Comparisons undertaken taken mostly with small states. Based on data collected from National Statistics, together with data bases held in the practice of DHI Periti.

Why is it important?

The present global credit crunch can offer some relief with regard to housing affordability for first time Maltese home buyers. Updating of restricted home rentals can lead to an improved working for the Maltese property market, with some of the large proportion of vacant units being released onto the market. It derives projections for likely future developments in this context and in the light of this discusses some policy options. An improvement into the quality of life for Maltese households delved into, whilst providing measures for households not to fall below the poverty line also indicated.

Perspectives

Mr Denis H Camilleri
Institute of Civil Engineers

Gives original views on projections for the housing affordability index, together with noting that a large vacant property market for the Mediterranean region possibly creates minimal damage to its proper functioning. Unfortunately this 2011 paper did not envisage the effects of the deregulation of the rental residential property market, which since 2012 up to the end of 2018 has inceased by 175% over this period. The property market did not react to these hefty rental increases, when the housing affordability index HAI at 2016stood at 130 declining to 105 in 2018. This has caused a housing strain in the affordable property market, as these are presently not available for locals & foreigners working in Malta. O the other hand this paper had envisaged that an improvement was to be realised in Malta's HAI thanks to the 2008 global credit crunch, whereby the HAI had improved from 74 in 2007 up to 132 in 2015.

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http://dx.doi.org/10.1108/17538271111111820

The following have contributed to this page: Mr Denis H Camilleri