In recent years, housing affordability has emerged as a growing challenge across much of Europe. The pressures are particularly pronounced in cities and tourist destinations, where strong demand can push up property prices and rents, making it increasingly difficult for households to secure suitable accommodation. Against this backdrop, the European Commission has launched the European Affordable Housing Plan, the first EU initiative of its kind to address the issue in a more comprehensive manner.
While housing affordability can be measured in different ways, at its core it concerns the relationship between housing costs and household income. Any assessment of Malta’s housing situation must also take account of its distinctive tenure structure. Around 85% of Maltese families are homeowners, approximately half of homeowners — generally among the older generation — have no outstanding mortgage, and a substantial share own a second property. Around half of first-time buyers purchase a property on their own, while the share of young people living with their parents has remained broadly stable. Nevertheless, particular groups, notably lower-income households and first-time buyers, face affordability pressures as property prices have increased.
This article examines housing affordability from a cross-country European perspective, placing Malta’s experience within the wider European context. Such comparisons need to be interpreted with care, however. National averages can conceal substantial differences between households, and a housing system that performs relatively well overall may still leave some groups facing significant difficulties in accessing or maintaining suitable housing.
The analysis therefore goes beyond national averages to examine housing outcomes across different population groups. The objective is not simply to determine whether housing is affordable at national level, but to understand for whom housing challenges are most acute.
House prices and economic activity
Residential property prices increased substantially across the EU between 2015 and 2025, although there were marked differences between countries. Hungary recorded the largest increase, followed by Portugal, Lithuania and Bulgaria. Malta recorded an increase of around 74% over the period, placing it in the lower half of the EU distribution.
House prices do not operate in isolation. Over the past decade, EU countries experienced significant differences in economic and population growth, two traditional determinants of housing demand. Malta provides a particularly notable example. Real GDP grew by an average of 6.2% per annum between 2015 and 2025, among the highest rates in the EU, while Malta also recorded by far the largest population increase.
There is a positive relationship across EU countries between nominal GDP growth and house price growth: economies experiencing stronger growth have, on average, also tended to record faster increases in house prices. Stronger economic activity can support household incomes, employment, housing demand and investment, thereby putting upward pressure on property prices. The relationship is far from perfect, however.
Malta is an interesting case. Despite recording exceptionally strong nominal GDP growth, its average annual house price growth was below what the cross-country relationship would predict. This does not, in itself, mean that Maltese housing faced less pressure, and the relationship should be interpreted as an association rather than a causal relationship.
How much does housing cost households?
A more direct measure of affordability is the housing cost overburden rate. This is defined by Eurostat as the share of the population living in households where total housing costs exceed 40% of disposable household income, after housing allowances. Housing costs include rent or mortgage interest, structural insurance, mandatory charges, regular maintenance and utilities.
In 2025, Malta’s housing cost overburden rate stood at 6.0%, below the EU average of 7.7%. There were substantial differences across Member States, with Greece and Denmark recording rates above 20%.
Malta’s figure needs to be interpreted in light of a methodological change. Since 2023, following the completion of the Census, the NSO has improved the coverage of foreign workers in the EU-SILC survey. This provides a more accurate representation of Malta’s population and housing conditions, but also creates a break in the series. In 2022, when foreign residents were captured less comprehensively, Malta’s housing cost overburden rate stood at 2.9%.
Importantly, the national average masks significant differences by income. In 2025, 21.5% of individuals in Malta’s lowest income quintile were housing cost overburdened, compared with just 5.7% in the second quintile and close to zero among the two highest-income quintiles. Housing affordability pressures are therefore heavily concentrated among lower-income households rather than being evenly distributed across the population. A broadly similar pattern is observed across most EU countries.
Tenure is another important dimension. More than one-fifth of private-market renters in Malta were housing cost overburdened in 2025, compared with 1.4% of outright owners, 2.1% of owners with a mortgage and 4.0% of households renting at a reduced price. Private renters are therefore considerably more exposed to housing cost pressures than other tenure groups.
Another useful measure is the average share of disposable income spent on housing. Malta recorded one of the lowest shares in the EU in 2025, at 12.6%, compared with an EU average of around 18.9%. This is partly explained by the country’s high proportion of outright homeowners, who generally face lower ongoing housing costs than households paying rent or servicing a mortgage.
Again, however, averages can conceal considerable variation. Among households at risk of poverty, housing costs accounted for 27% of disposable income in Malta, more than twice the rate for the population as a whole.
The highest burden was recorded among one-adult households aged under 65. This is a diverse group that may include first-time buyers living alone and, importantly, people who have experienced relationship breakdown. The data do not allow this to be established directly, although it is consistent with findings from the Housing Authority’s Satisfaction Survey, where separated individuals reported a higher housing cost burden than other categories. Among low-income individuals in this group, housing costs can account for more than half of disposable income. Larger households comprising three or more adults also face relatively high housing costs, particularly among those at risk of poverty.
Looking beyond the averages
Overall, the analysis presents a relatively favourable picture of Malta’s housing situation when compared with other EU countries. Housing costs place a smaller burden on households on average, while the average share of disposable income devoted to housing is among the lowest in the EU, reflecting in large part the high proportion of outright homeowners.
Yet the national picture tells only part of the story. Affordability pressures are disproportionately concentrated among lower-income households, particularly those renting on the private market. Single-adult households and on lower incomes appear particularly vulnerable, including a group that may contain a significant number of people affected by relationship breakdown. First-time buyers also face significant affordability challenges that require difficult trade-offs, and these pressures may be especially pronounced for those who cannot rely on financial or other forms of family assistance when entering the property market.
The findings reinforce the importance of looking beyond aggregate indicators and examining how housing outcomes are distributed across different population groups and tenures. The question is not simply whether housing is affordable in Malta on average, but for whom it is affordable — and for whom it is not.
This provides an important evidence base for the Housing Authority to continue reviewing and updating its schemes and policies, ensuring that they remain responsive to changing housing needs and increasingly targeted towards groups facing the greatest affordability pressures.