Malta’s Relentless Property Market: Why Prices Keep Rising

For most Europeans, buying property is about stability. For Maltese families, it has become an article of faith. It is a bet that rarely loses. Over the past decade, even as economies faltered and the pandemic shuttered global markets, Malta’s residential property market has defied expectations, breaking record after record.

Spunt Youtube Explainer on Property Price Increase

The numbers speak for themselves. An apartment purchased in 2012 for €100,000 would have been valued at around €178,000 by the end of 2020. The same sum left in a savings account would have grown to just €122,000. A diversified basket of shares on the Malta Stock Exchange might have fared slightly better, reaching €128,000. Property has simply outpaced all other local alternatives.

Why? The answer lies not in a single factor, but in the convergence of economic growth, demographic change, financial policy, and international demand.

The Economic Engine

Malta’s property boom coincided with one of the strongest periods of growth in its modern history. Beginning around 2013, government policy tilted firmly towards business-friendly incentives, which attracted investment and created jobs. GDP growth rates consistently outpaced the European average, leaving households with higher disposable incomes and greater access to mortgages.

Unemployment fell to near-zero levels, creating a new problem: labour shortages. Employers turned to foreign workers, bringing tens of thousands of newcomers to the island in a relatively short span of time. Each arrival represented additional demand for housing in a market where supply struggled to keep pace.

Tourism and the Short-Let Market

At the same time, Malta’s record-breaking tourism industry reshaped the housing market in subtler ways. The advent of low-cost airlines and improved connectivity brought millions of new visitors. Many sought value-for-money holidays by renting apartments through online platforms rather than booking hotels.

For property owners, this unlocked a new revenue stream. Apartments in Sliema, St Julian’s or Valletta were no longer just homes but became potential short-let businesses. As more investors entered the market to capture tourist demand, competition for properties pushed prices further upwards.

State Policy and International Buyers

Government policy also played its part. The launch of the Individual Investor Programme in 2013 tied citizenship and residency to property requirements, encouraging wealthy applicants to buy or rent Maltese homes. Though controversial, the scheme added pressure to an already overheated market, particularly in mid- to high-end developments

Cheap Money and Easy Credit

Perhaps the most important factor, however, has been the financial environment. For years, interest rates in Malta remained at historic lows. Depositing money in the bank became increasingly unattractive. At the same time, low borrowing costs encouraged both first-time buyers and speculative investors to borrow cheaply and buy property.

Developers, backed by inexpensive financing, accelerated construction projects. Yet even with more cranes on the skyline, demand consistently outstripped supply, keeping prices buoyant.

The Bigger Picture behind the Property Market Prices

The story of Malta’s property market is therefore not just about bricks, mortar, or individual buyers. It is about how global and local forces interact. Economic growth gave households more purchasing power. Demographic change swelled demand. Tourism and government policy opened new streams of buyers. And financial conditions created incentives to invest in housing over anything else.

But the lesson is broader: Malta’s housing market is not immune to cycles, yet for the past decade it has been the most reliable store of wealth on the islands. The question is whether this dynamic can last. As supply gradually catches up, and a push to decrease immigration is on the horizon, the forces that drove a decade of record-breaking growth may not hold forever. For now, though, property in Malta remains the investment that beats the bank, the stock exchange, and almost everything else.