We have grown accustomed to constantly hearing that Malta is a jewel in the Mediterranean. A place where everyone lives comfortably, with work for all and where you can plan your future and live a decent lifestyle. This was also backed by the fact that a number of foreigners have come to Malta due to its allure as ‘the place to be’ and the idea of wanting to make something of yourself.
Considering how things have evolved in the past couple of years, is this still the case?
Although unemployment is practically at its lowest levels ever, we now start to hear about foreigners leaving Malta due to the rapidly increasing cost of living. This is particularly associated with the cost of rent where it has now become the norm that a monthly fee nears and may easily exceed 1,000 Euro.
Is Malta slowly becoming the place where it is all about survival rather than living?
It is heavily argued that salaries simply cannot compete with the red-hot property market. Property prices have increased significantly impacting people from all walks of life, in particular, those who rent and also those seeking to step in and make their first home acquisition. This is coupled with increasing grocery costs and daily living expenses rocketing sky high.
We are now also hearing about the concept of homelessness, where people do not have a place to sleep in and are living in garages. This is a harsh reality that people who have well-paying jobs cannot fathom to understand.
This raises the question as to how sustainable Malta’s level of unprecedented growth is? We have a number of people investing their money by buying property and letting it, whilst by the same token we have people severely struggling to make end’s meet. Could we be looking at a potential scenario where all this halts? If Malta is no longer competitive, we could end up with having a significant number of foreigners leaving the island, causing problems on those who heavily depend on renting out their properties to make a good income and pay their debt. This would inevitably pose problems for banks if such borrowers are not able to honour their commitments.
There is no denying that the Malta Passport Scheme was one of the main contributors for this increase in cost of living, due to the influx of high net-worth individuals. Recent news reports a decrease of applications on a year on year basis, highlighting less interest as time progresses. This is an area of concern as Malta must maintain its attractiveness with such high net-worth individuals.
What is your view of Malta’s economic outlook? Is our current economic climate sustainable and should we anticipate further growth?