A traditional favourite with British holidaymakers, the small island of Malta is hoping to attract the luxury property investor. Once home to mass-market developments, Malta has learnt from its mistakes in the past and is now concentrating on high-end developments.
The Maltese emphasis is on the luxury sector, perhaps nowhere more so than in the capital, Valletta, whose Grand Harbour waterfront is currently seeing the fruits of a long restoration project. Costing around €25 million, Valletta Waterfront has been transformed from dilapidated rows of warehouses into a buzzing restaurant and retail area and a top tourist attraction. Near the Waterfront is the main quay, the principal entry point for the increasing number of cruise liners that include the island on their itinerary. The quay has just been lengthened to over 300m at a cost of €2 million and now allows larger cruise ships to dock.
Luxury property development is centred around specific areas on the island. Tigne Point is one such example. This rocky outcrop, which looks over to Valletta on the other side of the water, is a focus for luxury apartments. Construction at Portomaso in the St Julian’s district in the north of the capital includes a private marina.
Between joining the EU in 2004 and adopting the euro last year, property prices on Malta increased by around 8% annually. However, in common with many countries, Malta has seen a decline in its property market since 2008. According to the latest Knight Frank Global Price Index (Q1 2009), prices on the island experienced a year-on-year fall of 5.6% with a 1.7% drop in the first quarter of this year.
Maltese property is popular with foreigners who make up between 30% and 40% of buyers, with the British dominating the foreign buyer market. However, buying a property on Malta usually involves applying for a permit and the island implements strict purchase regulations for non-Maltese nationals. There are also rental restrictions – second homes cannot generally be let unless they are a villa with a pool or come into the category of “first-class luxury flat”.
“Malta has many attractions including its year-round climate and the increased availability of low-cost flights,” says James Gonzalez, Market Analyst at Obelisk Investment Property, “but it’s a small island and doesn’t suit everyone. And its purchase and rental regulations also restrict investment.”News submitted by Alison Kane, Obelisk Investment Property