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Maltese real estate is in a bubble (Change my mind)

MarkusCostigan

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Apr 23, 2022
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I personally believe that the Maltese property market is experiencing a strong bubble and could soon experience a major correction.

1.
Substantially all real estate companies listed on the Maltese stock market are in a multi-year bear market. (something pumped during covid, and then went down again).
As we know, financial markets discount events that occur in the economy much earlier.
Obviously we are talking about a ridiculous market with books that I won't comment on, but they still represent the country.

2.
Every low IQ expat wants to buy a house in Malta (clear top signal)

3.
They are starting to sell houses that are not yet completed or in planning (which was quite rare before), obviously to set a price that is much higher today than in the future.

4.
Prices are kept high mainly by apartments in which many people live (often Indians/Bangladesh and other low-level workers), who share the costs.

5.
The 5% refund will soon be abolished (Caruana), we don't know when yet but it's quite certain.
(If you didn't pay 5% there would be no point in staying in Malta as a company)

6.
Minimum EU Tax soon. (again)

7.
There isn't a single person I've spoken to who isn't convinced the market won't continue to rise.
They often use the excuse that Malta is small and there is no space. bulls**t. Licenses are widely granted, and there is still plenty of space left.

8.
The Nationalist Party will almost certainly win in the next round. Yes ok probably nothing will change.

9.
Huge amount of real estate available after over 20 years of wild construction. A small contraction in demand would be felt immediately.

10.
The end of Russia-Ukraine could create a significant drop in demand (Malta is really full of them)

11.
General super greedy behavior from the locals.

12.
Every non-maltese person on the island stays in Malta for some work/tax saving reason. Other than that there isn't a single person who would live there.

13.
Inflation is falling.

14.
Huge disparity between real salaries and ability to afford an apartment.


The only real reason that could remain is the non-dom system for natural persons, and the easily obtainable gaming (betting) licenses.
 
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14. Huge disparity between real salaries and ability to afford an apartment.
Isn't this like everywhere in Europe now? Except for some socialist countries. Check for example salaries in Dublin and their "very affordable" rental prices. With a minimum wage you will be lucky to afford a room. Average rent for an apartment in Dublin is over €2300.
 
I personally believe that the Maltese property market is experiencing a strong bubble and could soon experience a major correction.

You do raise some interesting points. The prices for properties and unconverted homes is outrageous. I am not even talking SDA properties :confused:. I sold my mold infested apartment in an SDA years ago after covid hit and made it impossible to rent out. There are two markets in Malta the SDA homes available for anyone to buy and non-SDA homes which is for EU and locals only. I have seen some ruins aka unconverted homes for sale in the past and they asked crazy money. However if both markets are in a bubble then its not a good sign.
 
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I personally believe that the Maltese property market is experiencing a strong bubble and could soon experience a major correction.

1.
Substantially all real estate companies listed on the Maltese stock market are in a multi-year bear market. (something pumped during covid, and then went down again).
As we know, financial markets discount events that occur in the economy much earlier.
Obviously we are talking about a ridiculous market with books that I won't comment on, but they still represent the country.

2.
Every low IQ expat wants to buy a house in Malta (clear top signal)

3.
They are starting to sell houses that are not yet completed or in planning (which was quite rare before), obviously to set a price that is much higher today than in the future.

4.
Prices are kept high mainly by apartments in which many people live (often Indians/Bangladesh and other low-level workers), who share the costs.

5.
The 5% refund will soon be abolished (Caruana), we don't know when yet but it's quite certain.
(If you didn't pay 5% there would be no point in staying in Malta as a company)

6.
Minimum EU Tax soon. (again)

7.
There isn't a single person I've spoken to who isn't convinced the market won't continue to rise.
They often use the excuse that Malta is small and there is no space. bulls**t. Licenses are widely granted, and there is still plenty of space left.

8.
The Nationalist Party will almost certainly win in the next round. Yes ok probably nothing will change.

9.
Huge amount of real estate available after over 20 years of wild construction. A small contraction in demand would be felt immediately.

10.
The end of Russia-Ukraine could create a significant drop in demand (Malta is really full of them)

11.
General super greedy behavior from the locals.

12.
Every non-maltese person on the island stays in Malta for some work/tax saving reason. Other than that there isn't a single person who would live there.

13.
Inflation is falling.

14.
Huge disparity between real salaries and ability to afford an apartment.


The only real reason that could remain is the non-dom system for natural persons, and the easily obtainable gaming (betting) licenses.
I agree with most points except No.12. If you know Malta, it can be excellent for retired people and for those who want property without problems. Apart from the electricity/water bills (paid online) there is no council tax/taxe d'habitation etc to pay. Unlike places like Italy and France, they don't care who lives there. The public transport is very cheap and quality of life is great if you avoid the north over-crowded areas. The health system is top class and cheaper than most other countries. Yes, the construction industry has become crazy and it's all going to end in tears. A lot of corruption and greedy locals controlling the politicians. It's just a question of when tourists will realise that it's not such a great place for a holiday.
 
I agree with most points except No.12. If you know Malta, it can be excellent for retired people and for those who want property without problems. Apart from the electricity/water bills (paid online) there is no council tax/taxe d'habitation etc to pay. Unlike places like Italy and France, they don't care who lives there. The public transport is very cheap and quality of life is great if you avoid the north over-crowded areas. The health system is top class and cheaper than most other countries. Yes, the construction industry has become crazy and it's all going to end in tears. A lot of corruption and greedy locals controlling the politicians. It's just a question of when tourists will realise that it's not such a great place for a holiday.
Good post from someone who seem to know Malta from the inside thu&¤#
 
I agree with most points except No.12. If you know Malta, it can be excellent for retired people and for those who want property without problems. Apart from the electricity/water bills (paid online) there is no council tax/taxe d'habitation etc to pay. Unlike places like Italy and France, they don't care who lives there. The public transport is very cheap and quality of life is great if you avoid the north over-crowded areas. The health system is top class and cheaper than most other countries. Yes, the construction industry has become crazy and it's all going to end in tears. A lot of corruption and greedy locals controlling the politicians. It's just a question of when tourists will realise that it's not such a great place for a holiday.
Some fresh data:

The Maltese are the fourth biggest worriers in the world, according to recently released polling data.
Only Afghanistan, Israel and Guinea reported higher levels of worry than Malta, while just nine countries out of the 142 surveyed reported feeling more stressed.


The health system is top class and cheaper than most other countries.
Private. Just the private. Ok. Is true.

I agree with most points except No.12. If you know Malta, it can be excellent for retired people and for those who want property without problems.
So breathing in all kinds of dust from construction work every day isn't a problem?
Okay... probably in Gozo or in the quieter areas there is certainly less construction going on.


The public transport is very cheap and quality of life is great if you avoid the north over-crowded areas.
It's true that it's cheap, in fact it's even free with the Tallinja card... Public buses are always full and mostly clogged. It can take you up to 40 minutes to do 5km. The traffic is crazy.


A super point in Malta's favor that I should add is safety. Incredible as it may seem, it is a truly safe place in terms of personal safety. (provided you mind your own business and don't talk about politics obviously, or don't touch the wallets of the Maltese)
 
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Are they going to do the so much talked monorail?
I never heard about a monorail. They were talking about a tunnel between Malta and Gozo for many years but I think this crazy idea has been dropped.

Yes the traffic is crazy, but it is possible to survive with using the bus. The buses are sometimes very crowded, but there are some tricks - e.g. first travel to where the bus begins the journey so you get a seat. Google maps is great for planning the journey and much better than the Tallinja app!! Or simply take a taxi. The Maltese love their cars, but I find driving too stressful.
 
It was a project I read about when i lived there, i thought it was a good idea.

Yes, I agree. If combined with the buses, it would make travel much easier. Though, having seen htheir construction industry, I wouldn't want to live above where they dig the tunnels! :cool:
 
You do raise some interesting points. The prices for properties and unconverted homes is outrageous. I am not even talking SDA properties :confused:. I sold my mold infested apartment in an SDA years ago after covid hit and made it impossible to rent out. There are two markets in Malta the SDA homes available for anyone to buy and non-SDA homes which is for EU and locals only. I have seen some ruins aka unconverted homes for sale in the past and they asked crazy money. However if both markets are in a bubble then its not a good sign.
What do you mean by SDA?
 
What do you mean by SDA?

Special Designated Areas. If you want to buy property in Malta and your not from Malta or EU then you can only purchase in those areas without an AIP :confused:. Malta has a protected property market like i.e UAE where only Gulf nationals can buy property in certain areas.


 
In the last 20 years I've heard so many people warning about "bubble about to burst in real estate" any moment now, in London, Germany, New York and many other places. 99% of them were wrong.

In general the way it works is: people who bought all say that real estate will rise forever. People who missed out on the action and didn't buy, are all whining about a bubble and secretly hate anybody who bought and made money. If you want to buy, buy it. If not, don't buy. Real estate is a crappy investment ever when compared to a simple ETF.

99% of people here who predict stock market crash every week, are mostly haters who remained fully in cash since 2013 and can't wait for the market to crash to "prove them right".
 
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