Median Property Prices Rise 10% as Affordability Worsens in the Last Year Despite Longer-Term Gains
New KPMG research challenges the perception that Malta’s property market has become progressively less affordable. But improvements in the national figures conceal a growing divide between those who already own property and those attempting to enter the market.
Property prices in Malta have risen considerably over the past decade. Apartments have become more expensive, rents have increased, and younger households regularly express concern about their ability to purchase a home. It is therefore tempting to conclude that housing affordability must have deteriorated as well. Yet the evidence tells a more complicated story.
According to KPMG’s Construction Industry and Property Market Report 2026, housing affordability in Malta improved on several important measures over much of the period since 2019. Although property prices increased, household incomes generally grew faster, allowing the price-to-income ratio to decline. Malta has also performed comparatively well against European benchmarks, while homeownership among Maltese citizens remains exceptionally widespread.
These findings challenge the assumption that rising property prices necessarily mean declining affordability. The distinction matters because housing affordability depends not only on how much a property costs, but also on how much households earn, their borrowing conditions, available savings and the financial resources needed to enter the market.
The report nevertheless identifies an important qualification. While Malta’s aggregate affordability indicators have improved, access to homeownership remains substantially more difficult for lower-income households, single purchasers and those without accumulated savings or family assistance. Rather than demonstrating a uniform housing crisis, the evidence points towards an increasingly segmented property market.
Prices have risen, but so have incomes
KPMG estimates that the median advertised asking price of an apartment in Malta increased from €265,000 in 2019 to €350,000 in 2026, a rise of approximately 32%. Price growth has accelerated particularly sharply in the past two years, with median asking prices increasing from €285,000 in 2024 to €317,000 in 2025 and €350,000 in 2026.
Yet property prices alone provide an incomplete picture of affordability. Over the same period, median equivalised net income increased substantially, from €15,354 in 2019 to €22,034 in 2025, with KPMG estimating a further increase to €23,177 in 2026.
Consequently, the ratio between median apartment asking prices and median equivalised net income declined from 17.3 in 2019 to 14.4 in 2025. Even with the estimated increase to 15.1 in 2026, the ratio remains below its 2019 level.
Apartment prices rose by a third, but their price relative to income fell
Median apartment asking price divided by median equivalised net income
In practical terms, this means that property prices increased more slowly than the income measure used by KPMG over much of the period. An apartment may cost considerably more in euros today, but its price relative to income is lower than it was several years ago.
The distinction becomes even clearer when Malta is compared with the European Union. KPMG reports that Malta’s standardised house price-to-income index stood at 89 in 2024, compared with an EU average of 106, with both indexed to 100 in 2015. This suggests that affordability evolved more favourably in Malta than across the EU as a whole over that period.
However, this comparison requires careful interpretation. The index measures changes relative to 2015, not the absolute cost of housing in different countries. It therefore does not establish that Maltese property is cheaper than property elsewhere in Europe, only that the relationship between prices and incomes has moved more favourably.
There is also a more recent warning. In 2026, KPMG estimates that apartment asking prices increased by approximately 10.4%, exceeding the estimated 5.2% increase in median equivalised net income. This suggests some deterioration in affordability compared with 2025, although the income figure remains provisional and the longer-term improvement has not been entirely reversed.
Furthermore, KPMG’s advertised asking prices are not the same as completed transaction prices. The composition of properties listed for sale can change between years, affecting the reported median. The report itself notes that the average size of finished apartments in its sample declined from 123 square metres in 2024 to 117 square metres in 2026.
These qualifications do not undermine the broader finding that affordability improved over much of the period. They do, however, caution against interpreting any single year’s movement as definitive evidence of a lasting change in market conditions.
The divide between homeowners and prospective buyers
Perhaps the most revealing finding in KPMG’s report concerns Malta’s unusually high level of homeownership.
In 2025, approximately 70.9% of Malta’s population lived in owner-occupied accommodation, compared with 68.5% across the EU. More significantly, 87.9% of Maltese citizens lived in owner-occupied homes, compared with just 32.3% of foreign citizens.
Nearly nine in ten Maltese citizens live in a home they own. Fewer than a third of foreign citizens do
Share of people living in owner-occupied accommodation, 2025, %
The distinction matters. Malta’s overall homeownership rate has declined from the levels recorded earlier in the decade, but this does not necessarily mean Maltese citizens have become less likely to live in owned homes. The growing proportion of foreign residents, who are considerably more likely to rent, has influenced the national average. KPMG also identifies a methodological break in the statistical series in 2023.
The result is a housing market in which homeownership remains firmly established among Maltese citizens, even as the overall composition of housing tenure changes.
Another important finding is that 51% of Malta’s population lived in owner-occupied accommodation without an outstanding mortgage or housing loan in 2025. A further 20% lived in owner-occupied accommodation with a mortgage.
For households that already own their homes, rising property prices can represent an increase in wealth rather than an immediate deterioration in affordability. Those without outstanding mortgages are also relatively insulated from changes in mortgage interest rates and the need to qualify for new housing finance.
Prospective buyers face a different economic reality. They must purchase property at current prices, secure a mortgage and accumulate sufficient savings for a deposit and associated expenses.
This creates an important distinction between the affordability of housing for the existing population and the accessibility of homeownership for those entering the market. A country can have high ownership rates, relatively low housing-cost pressures and improving aggregate affordability indicators while still presenting substantial barriers to younger or lower-income buyers.
KPMG’s housing-cost overburden figures reinforce this contrast. In 2025, 6% of Malta’s population lived in households where housing costs exceeded 40% of disposable income, compared with 7.7% across the EU. While this suggests that severe housing-cost pressure is relatively contained at an aggregate level, it says considerably less about the financial obstacles faced by someone attempting to purchase their first home.
The report’s borrower simulations make these differences particularly clear.
A young couple earning two average incomes, equivalent to a combined gross annual income of €54,768 in 2026, could theoretically afford approximately 82.4% of the finished apartments advertised in KPMG’s database, under the report’s mortgage assumptions.
For a couple earning a combined €36,012 in elementary occupations, the proportion falls to 35.8%. For a couple earning two minimum wages, with a combined income of €23,862, only 4% of advertised finished apartments fall within their estimated purchasing capacity.
Single purchasers also face more limited options. A professional earning €43,634 annually could theoretically afford 48.8% of advertised finished apartments, while a single worker in an elementary occupation earning €27,984 could afford only 7.7%.
Two average earners can afford most finished apartments on the market. Two minimum-wage earners can afford almost none
Share of advertised finished apartments within estimated purchasing capacity, 2026, %
These figures illustrate the extent to which homeownership opportunities depend on earnings and household composition. The difference between two-income households and lower-income or single purchasers is substantial, particularly when buyers must also finance deposits, finishing costs and other expenses.
The simulations are illustrative rather than definitive. They assume the availability of a 10% deposit and use estimated mortgage eligibility under specified lending conditions. KPMG also acknowledges that its advertised property database may underrepresent some cheaper properties and that changes in the composition of listings affect year-on-year comparisons.
Nevertheless, the pattern is clear. Malta’s affordability challenge is concentrated more heavily among particular income groups and market entrants than national averages alone would suggest.
Why property prices continue to rise
The report’s stakeholder consultations offer further insight into why property prices remain under pressure despite relatively favourable aggregate affordability indicators.
The most frequently cited factor is the rising cost of development land. Industry participants described land as increasingly scarce and expensive, with some reporting that land values were rising faster than broader construction costs. Developers consequently face pressure either to increase selling prices or reconsider the financial viability of projects.
Demand has also remained resilient. Malta’s economic expansion, investment preferences and continued demand for residential accommodation have supported the market. Property remains an important investment vehicle, with a strong cultural preference for ownership and considerable interest in residential investment.
Some stakeholders raised concerns about speculative practices and the tendency for sellers to increase asking prices in response to wider market expectations. However, the report does not establish the scale of these effects or demonstrate that speculation is a principal driver of property inflation.
The role of government incentives is similarly complex.
Measures supporting first-time buyers can improve purchasing capacity and help households enter the property market earlier. However, some industry participants cautioned that broad purchasing incentives may be partially reflected in higher property prices, particularly when the supply of suitable homes cannot respond quickly to increased demand.
KPMG does not conclude that government incentives are a major cause of house-price inflation. Its consultations suggest that land scarcity, development costs and continuing demand are more important underlying pressures. Nevertheless, the potential for subsidies to influence prices warrants greater scrutiny.
This raises a familiar economic problem. Financial assistance can make housing more accessible to an individual household without necessarily making the underlying property market more affordable. Where supply is constrained, part of the additional purchasing power may ultimately benefit sellers through higher prices.
KPMG therefore points towards better-targeted support, greater transparency and consideration of measures that increase the availability of affordable housing.
Such an approach would recognise that not all buyers face the same constraints. A couple earning two average incomes may need relatively little assistance, whereas a lower-income household may struggle to qualify for a mortgage even with government support.
The real affordability question
KPMG’s findings suggest that Malta’s housing debate requires greater precision.
It is possible for property prices to rise while affordability improves, provided incomes increase sufficiently. It is also possible for a country to record strong homeownership rates and relatively favourable European comparisons while particular groups encounter significant barriers to purchasing property.
Both have occurred in Malta.
The longer-term improvement in price-to-income indicators should therefore not be dismissed simply because property prices have increased. Equally, it should not be used to suggest that housing access is no longer a problem.
The more relevant policy question is which households face the greatest difficulties, why those difficulties persist and whether existing interventions are addressing their causes.
For younger households without savings, the primary obstacle may be accumulating a deposit. For lower-income workers, it may be insufficient borrowing capacity. For others, it may be the limited availability of suitable properties within their preferred locality or the additional cost of finishing a home.
These problems require different policy responses. Broad purchasing subsidies may improve access for some households, but more targeted assistance, greater availability of appropriately priced homes and improvements in household earning capacity may offer more durable solutions.
There is also a longer-term question concerning the economic forces supporting housing demand. Malta’s development model, population growth and investment preferences all influence the property market. Decisions about productivity, employment and the future composition of the economy will consequently affect housing demand and the type of accommodation required.
Ultimately, the KPMG report challenges two oversimplified narratives. The first is that rising property prices prove housing has become progressively less affordable. The second is that favourable aggregate indicators mean affordability problems have largely been resolved.
Neither accurately reflects the evidence.
Malta’s housing affordability has improved over much of the past decade, but the benefits are not evenly distributed. The challenge now is less about reversing a universal deterioration in affordability and more about ensuring that households without existing property wealth can participate in a market that remains economically significant, increasingly expensive and highly sensitive to differences in income.
Source: KPMG, Construction Industry and Property Market Report 2026, draft edition. Analysis based primarily on Chapters 2, 3 and 4.