Malta - British Expat Forum

Hi Folks

Just a "heads up" really, as I will be looking at properties in Malta and Gozo, to buy or rent, from next week.

My experience of looking in Cyprus has shown that a small number of (good) properties are selling, sometimes to international buyers from Russia and Germany; others are drifting down in price by 10%, 20% or more a year.

Are asking prices inflated and open to (much) negotiation? Or do you just make offers and see what happens?

I know replies are likely to depend on whether you're a buyer or seller!

Hi Mr B: I think an equally important question should be "what are the pro's and con's for property purchase in Malta".
Many Brits feel compelled to sell up and then purchase again at their destination. Property in the UK has a "feel good" factor that may be entirely inappropriate elsewhere. It might be a costly mistake.

We quite often see advice on here saying that you should rent before you buy. We took that advice and rented for a couple of years (not in Malta) then, when we were much more familiar with the area, we bought because we like to have our own place to do our own thing. I think this was the best way forward for us. I would never move to a new country and just buy a place without understanding all the issues involved.

It's not just about investment. We bought a home rather than investing in a property. If we were to move, I'd do the same again and rent for at least a couple of years till we got our bearings of the place.

We're renting, but from what I've seen in estate agent's windows, etc Maltese houses are overpriced and poor quality compared to the UK.

Buying a property in Malta might seem easy, but selling it in a year or two might be more difficult than most people think. Remember a buyer's market is not a seller's one!!

A Maltese lady told my parents, to be very careful if they bought a property. If circumstances changed (e.g. illness or death), and the property had to be sold; Maltese buyers, realising that someone is eager to sell (to leave the islands), will take advantage, and make ridiculously low offers.

Red

Better a ridiculous offer than none at all

Some properties are priced reasonably, some have been on the market for 2-3 years, without a price cut (so could easily be 30-50% over priced) - so its difficult to generalise. The same property can be on with several agents at different prices as well. Thing is - look at lots of properties, and you soon get a feeling for what is the market price

When you buy, there are 5-7% costs -f you decided to sell after a year as you don't like Malta, another 3-5%, so 8-12% costs. I really recommend renting first, esp when the property market is as slow as it is, and likely to remain so for many years in my opinion

gozomark wrote:I really recommend renting first, esp when the property market is as slow as it is, and likely to remain so for many years in my opinion

The market sounds similar to Cyprus in some ways: the local currency was fixed to the Euro at a relatively high rate, that now seems too high (think Greece etc). The UK £ has declined to a "fair" market rate, but not these small currencies/markets. This makes properties over priced by "middle England" standards.

Exceptional properties will sell to "world" buyers, but not "normal" homes to a holiday or retiree market.

Rental properties adjust faster to "reality"

Of course, anything will sell at the right price.

I think Malta joined the euro at about the right rate - its an open economy, and its international trade is reasonably balanced, so I see little evidence of an overvalued currency - most things are reasonably priced, its just that property is expensive - why ?

1. highly populated country
2. a lot of speculation ahead of EU membership
3. too much speculative building which is left semi-finished, but being offered at too high prices as the seller is in no hurry

When we moved here 8 years ago, property was reasonably priced, and rental yields were around 5% - since then prices are up 50-75%, and rents are down 10-25%. 8 years go, the cost of servicing a mortgage was comparable to renting, its now far cheaper to rent - when you take into account the costs of maintaining a property renting costs less than half buying. Something will give, and given the amount of property vacant I think its values that will drop rather than rents going up. I've been saying that for the last few years, and continue to believe it.

One bright spot might be town houses - so many town houses are being knocked down and converted into apartments that the stock of town houses is shrinking

gozomark wrote:. Something will give, and given the amount of property vacant I think its values that will drop rather than rents going up. I've been saying that for the last few years, and continue to believe it.

I suppose it depends upon whether you want to sell or not. In Cyprus, locals tend not to sell, unless they are "so called" developers. Families keep their homes, because there is nowhere for them to move to . Most homes on the market are expats selling to expats via expat agents. Prices are drifting down, but generally people are reluctant to reduce their asking prices by more than say 10% a year.

Both Cyprus and Malta have the problem of their being no public data on sold prices. Malta does seem to be more open than Cyprus: no obvious problems with title deeds, and no obvious examples of sellers selling via a developer, who then marks the property up by 30% or so . There seems to be a smaller expat market in Malta.

Caveat emptor

Our neighbours bought their flat on-plan (in Sliema) three years ago. They have had it on the market for four months now at the original price and have not managed to sell yet. New properties are still being built in this area and I can only see house prices declining in the immediate future. Good for buyers however it you know Malta is where you want to settle.

Sorry to drag up an old thread, but I have a question related to this and there are a lot of very good points made on this one already.

I am currently living with my young family in Sliema. We are looking to move somewhere quieter at the end of the year, and Madliena seems like a good option. The question has now arisen as to whether we rent or buy.

I am not looking to make a quick buck from buying a property, I am after a home. However, what I do not want to do is buy somewhere that is worth 30% less in 2 years time. My instinct is that Maltese property is hitting a "perfect storm", and there are a number of factors contributing to this:

- a massive existing oversupply of properties
- continuing development, irrespective of the above point (i.e. everyone turning Granny's townhouse into apartments)
- loss of confidence in the local market (note substantial if not apocalyptic price falls to date), the global markets and the ongoing credit squeeze.
- (perhaps most crucially) the heavily-relied-upon overseas buyers realising they can get substantially better value "homes in the sun" on the Costas, where the market has plummeted.

As such, I think now is a very dangerous time to buy in Malta.

I would, however, be very interested in other peoples' views on this. I appreciate there is no absolute answer on this (or we'd all be making fortunes trading derivatives), and it may well be that I am being hopelessly paranoid.

Any agreement or counter-arguments? I would be really interested in your views.

agree

Agree too - but on a point of order, not everyone can make a fortune trading derivatives - about half the people trading derivates are losing a fortune.

I'd say don't purchase yet...............and it may be a long Y E T. c.

True - the low cost of ownership of empty property and low interest rates means there's little incentive to cut prices. Most developers would rather have an empty place they think is worth e200,000 slowly deteriorating than have e100,000 in the bank earning interest. There are a few firms who sell at realistic prices and behave as foreign buyers expect like completing entire developments even if unsold and selling the garages with the dwellings but in Gozo you can almost count them on the fingers of one finger.