Property in Malta cheaper as demand for home loans slumps

It could be a great time to buy a
property in Malta after recent figures showed a fall in house prices brought
about by an oversupply of property and a steep fall in demand for mortgages.

New figures from the European
Central Bank (ECB) show that requests for home loans to Maltese banks fell
sharply during the last quarter of 2011 and worse figures are expected for the
coming year.

Oversupply of property in Malta

The ECB survey found that Malta
is among six EU member states experiencing a ‘significant deterioration” in
requests for new mortgages.  The Times of Malta reports that ‘the other
countries are Spain, Italy, Belgium, Finland and the Netherlands.’

An ECB official said: “Malta’s
results show the country is heading for some economic trouble if the trend
reported by Maltese banks continues.”

The most recent Central Bank
quarterly review found that property prices in Malta have fallen by 2.6 per
cent in the last year while new building projects are also declining.

According to the most recent
figures from the Maltese Central Bank and the NSO, the number of building
permits issued for residential buildings fell by 24 per cent in the third
quarter of 2011 compared with the same quarter of 2010.

The Times reports that ‘the Malta Developers Association last year said
that permits for new dwellings had also plunged – from 11,343 in 2007 to 4,444
last year.’

ECB sources said: “Malta’s
economy in general last year grew at a higher pace than the euro area. The
significant drop in the building industry might also be a result of oversupply
and a construction frenzy which took place in the past years. We have the same
situation in Spain.”

Falls in property prices and a
large stock of unsold property can offer excellent opportunities for
buyers.  Nick Marr from leading overseas
property website Homes Go Fast said: “The situation in Malta is similar to
other countries that experienced a ‘building boom’ over the last decade. 

“With fewer buyers and a large
stock of new homes, savvy Brits can snap up a real Maltese property bargain.”