According to Knight Frank, the world’s most respected real estate consultancy firm, Malta has the fastest growing housing market in the world. Growth jumped up by 16.9% in the second quarter alone and South Africans are among the highest investors.
Before we look into why South Africans are investing in Malta, let’s find out what sets this Mediterranean jewel apart from other regions in Europe.
Reasons for Malta’s Housing Market Growth
There are various factors that contribute to the growth of Malta’s housing market. For one, the country’s Residency and Individual Investor Programs (IIP) have done a lot to stimulate foreign investment and boost the country’s economy.
Also, Maltese residents are known to value property ownership over renting and citizens are encouraged to seek real estate investment early on in their careers. Coupled with a low interest rate, this has stimulated a fair amount of growth within the real estate market. However, it seems like it’s not only the Maltese who are seizing the opportunity to invest in Malta. South Africans are the leading foreign investors in Maltese real estate property after the Chinese.
What South Africans Love about Malta
Malta’s property assets offer long term profitability for investors because the island’s capacity to produce infrastructure is limited by the available land mass. The country is one of the most politically and economically stable in the entire EU region. Also, Malta is a major trade route since its Mediterranean shore is in close proximity to North Africa, so it acts as a connecting point between the two continents.
Average annual capital growth in Malta is around 7% to 10% and this goes for both sales and rentals. As a result, investors see Malta as the perfect place to buy a second property, a holiday home, a timeshare, buy-to-let or buy-to-hold property that adds to their portfolio.
Lastly, it’s no secret that Malta is one of the world’s most renowned holiday destinations and it’s mutually attractive to anyone looking for an idealistic getaway in the sun. The country experiences approximately 300 days of sunshine out of the year and there’s no denying its stunning natural beauty.
When taken together, these factors help to explain the annual rise in Malta’s property market. As mentioned the demand comes from both local and international investors, particularly from South Africa.
How to Buy a Property in Malta
Buying property in Malta is a fairly straightforward process and it usually follows these four easy steps after you’ve found a property that you like:
- You sign a document that’s known as the “promise of sale agreement”
- Pay a 10% deposit
- Hire a notary to register your agreement with the relevant government agency. The notary must also conduct searches to ensure that the property is unencumbered. The last thing you want is to invest in a property that doesn’t have a clear legal title as that may affect the conditions set out in the promise of sale agreement.
- Sign the final deed and the property will be registered in your name.
Aside from the purchasing price of the property itself, the buyer is required to pay an additional 5% of the property value as stamp duty, and 1 to 3% as a notarial fee. In addition, the buyer has to pay an “Acquisition of Immovable Property” permit fee of €233, as well as a €600 fee for searches and registration.
Malta has one of the fastest growing economies in the world and property values are seeing year-on-year growth. The country is one of the most stable in the EU and Schengen area, and the Maltese government has introduced legislation that makes it simple and easy for foreigners to buy property in the country.
South Africans particularly appreciate the level of safety offered by Malta, because it isn’t always available in their home country. Buying Maltese property offers them peace of mind knowing that they have a second home in a more stable country. Plus, Malta has a plethora of stimulating activities for the whole family to explore. From snorkeling and diving, to sightseeing and shopping, Malta truly has it all.
If you’re interested in buying real state in Malta, check out this comprehensive guide to purchasing property in Malta, offered by one of the leading real estate agencies in the country, Malta Sothebys Realty.