A positive outlook
Robert Spiteri Paris, managing director, Perry Estate Agents, takes a look at how the post-pandemic property market is developing.
Last March marked exactly two years since COVID-19 struck us like a bombshell, leading to the first national lockdown and a time of uneasiness and unpredictability in the market, as residential and commercial property markets seemed to be heading towards an indefinite freeze and we, as estate agents, began planning for what we anticipated would be endless months of interruption.
There was a natural expectation that a number of konvenji or promise of sale agreements could fall through due to the unprecedented circumstances negatively impacting businesses of all scales and industries nationwide. As a matter of fact, and much to our satisfaction the vast majority of promise of sales held together and our experienced property consultants successfully saw them through to final deed.
Thanks to various government incentives – prime of which was the scheme for the reduction of property transfer tax and stamp duty allowing for a phenomenal reduction of stamp duty from five per cent to 1.5 per cent on the first €400,000 of immovable property transferred – the property market in Malta continued to see remarkable growth across most sectors. The exception was the residential letting market which experienced a correction in prices and a 20 per cent dip in average rental values.
Many tenants also requested discounts on their existing rents. Supply on the letting market quickly began to exceed demand due mainly to the fact that the Malta International Airport was temporarily shut, negatively impacting the once buoyant short-let market, with many of these landlords shifting to the long-let market for revenue till tourism recovered and the holiday let market bounced back.
This year we have seen demand for residential letting property return to pre-pandemic levels as rental values reach new highs while the coronavirus pandemic recovery continues.
Certain commercial sectors were also impacted negatively including mainly the office, retail and hotel/hospitality sectors – the pandemic became the biggest tipping point for these booming sectors that transformed overnight.
In the office sector, many businesses allowed for flexible working arrangements with a phenomenal shift from in-office to hybrid/remote work as companies realised that their staff could be equally productive working from home, impacting corporate location strategies. These extraordinary circumstances are already coming back to normal with demand for physical office space increasing gradually. We believe the office sector will experience a great rebound as the return to the office by staff is also seen by many as a symbolic step forward in post-pandemic times. Offices will always provide a crucial role in connecting colleagues and company culture which most people want and have come to appreciate more.
The prime residential market remained surprisingly resilient and robust throughout the prevailing COVID-19 pandemic and remains exceptionally strong with stock/supply remaining the biggest challenge for prospective buyers. Thanks to our superior knowledge of this market owing to our 40 years of experience we have been able to source and sell some of Malta’s best quality properties on offer. Prospective buyers at this level of the market seemed to remain undeterred by the challenges the pandemic posed on global economies. The imbalance of supply and demand with new high-end lifestyle developments, like Mercury Towers even being close to selling out before completion will continue to fuel price growth in the coming months.
Despite the severe reduction in the volume of foreigners visiting our shores during the pandemic, an exceptional number of motivated buyers have travelled to Malta with the specific intention of acquiring property here with sales registered across all price ranges. Sales and letting inquires continue to increase providing for a very positive outlook.
There are many factors that we feel have continued to fuel this post-pandemic demand including Malta’s exceptional geographic location and climate in the beating heart of the Mediterranean, tax incentives, rich culture, quality of life offering attractive lifestyle and overall safety with one of the lowest crime rates and a strong economy with various residency programs as prospective clients also continue to see property located in the long sought after Maltese property market as a ‘safe-haven’ investment.
For more information visit www.perry.com.mt
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