Tiny Malta makes impact
Mediterranean islands fringed by white-sand beaches and azure seas have always been a magnet for foreign holidaymakers. In the heady days until 2009, Greece was one of their favourite playgrounds.
But now that its appeal has gone off like a bucket of prawns in the sun, Malta is on their radar. According to official figures, 1.4 million tourists visited Malta last year, a 6 per cent increase on the previous year, and the fifth tourism record in five years. Their spending of Euro3.3 million (HK$32.7 million) every day provided a welcome fillip for a pocket-sized island with a permanent population of under 500,000.
In the context of its bigger, bolder but beleaguered neighbour, Malta enjoys relative economic stability. Daily needs are cheaper, with restaurant prices 24 per cent lower and consumer prices and rent about 8 per cent lower in Malta compared with Greece. Local purchasing power in Malta is a massive 77 per cent higher.
Given that foreigners can freely buy property in Malta, it seemed only a matter of time before investors would want to stake their claim. New data suggests the word is now out.
According to property website TheMoveChannel.com, Malta edged into the top 10 overseas property destinations last month, accounting for 2.59 per cent of inquiries on the overseas portal during that period. It climbed four places on the international chart to become the eighth most popular place in the world for real estate buyers.
It may be the European Union's smallest country by population and size, but Malta made a bigger impression on the portal than Germany, Greece or Cyprus last month, a mere 0.04 per cent behind perennially popular Turkey. But while Turkish prices have been increasing amid constant buyer demand, Malta, described by the portal as an overlooked market, 'teased investors with more affordable homes'. In further contrast with Malta's growing market share, inquiries for property in Spain and the United States were also down for the month.
The portal described Malta's ascension as a small shift, but one that in the coming months could become decisive.
Ray Woods, of Malta Buy Property, explains the market's appeal. 'Despite the problems elsewhere, the economic fundamentals of Malta look pretty sound and provide an encouraging backdrop for the property market. Development land is in short supply and the population is increasing. Combine this with low unemployment rates, ready availability of mortgage finance and continuing interest from overseas, and the prospect for property is good.'
With properties starting from about Euro100,000, the fall in the currency's value has given added impetus to Malta's property market, he says. 'Vendors have seen what is happening in the wider world and are more prepared to be flexible when cash buyers arrive.'
Woods says Malta also offers a convenient jumping-off point for Europe, North Africa and the Middle East. It has political stability and a growing economy. Home ownership runs at 98 per cent, and it has an unemployment rate many would envy, at 6.5 per cent.
'As a small island with development land in short supply, land values are rising,' he says, quoting a 50-year average of 8 per cent annual growth in property values. There are no property or council taxes in Malta, and bank finance is readily available.
'Attractive incentives' are offered for those wanting to set up their own companies. Woods points to New Smart City, a hi-tech commercial and residential complex on a greenfield site, which is now being built. A number of other prime sites have attracted corporate tenants, including HSBC.
Key property developments include Ta' Monita, a luxury finished project in the waterfront town of Marsascala, to the east of the island. The site of an old hotel, the development comprises studios, one-, two- and three-bedroom apartments and penthouses, with a pool, piazza and underground parking. Marsascala, a fishing village since Roman times, is relatively laid back, and a popular residential and tourist location for locals and foreigners. The seaside promenade, with its cafes, is a hub of activity. The airport and Valletta are within a 20-minute drive. Ta' Monita has been hailed for setting new standards for development in the town. Prices start at Euro105,000.
Fort Chambray, a luxury development within a historic fortress on the island of Gozo, offers expansive views. Its low-rise design respects the sensitivity of the area. Each block is connected by narrow, winding alleys, some covered with vaulted ceilings, lit at night for a subtle mix of old and contemporary architecture. The fortress is free of traffic, although underground garages are provided.
Villas of over two or three floors have varying outdoor space, including some with pools. There are also two communal pools. Prices start at Euro190,000.
Other premium projects, such as Portomaso, with its mix of luxury homes, shops and leisure amenities, are also appealing to foreign buyers, attracting a new wave of young and wealthy residents to Malta.