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?
Other countries have been there before, now look at the shambles they are in now.
I can speak as a Maltese person. It’s very hard to live when renting and working a normal job whit the minimum wage of 5euro. I have paid all my money for rent food gas electricty and have nothing left to save up to maybe buy a home and pay the loan instead of rent or just enjoy a little bit. Working full time but still have no money at all in my pocket. Worried as if something comes up more problems will come with it. I agree Malta has become a place where you have to survive at least for people like me and I am Maltese maybe I can find help from my family but the foreigners I can’t imagine how they live being here all alone. Only if the prices of homes are reduced or if not at least help with better wages of at least minimum wage 1000euro for a person to live decently….
You are right….. I’m single mother from Italy and 4 years ago it was paradise here…. now is just surviving
Rent has increased tremendously over the last 5 years
The food prices are starting to rise and the minimum wage is a joke. Apparently we have the fastest growing economy in Europe but still the wages are poor.
A bubble will burst very soon
What more to say you get paid 1200 eur if you are lucky for full time job from Monday to Saturday and you cost off living go up to 1500 its mean, you need to work plus part time job.. when finish the season you spend what you earn more in summer and wait for the new summer this is not a good place for living anymore
I’ve just moved here in the end of the summer due to what I read on the internet very low unemployment rate and good salaries. The minimum wage is a joke while the rent is super expensive food is more expensive than in the UK.
I’ve just moved here in the end of the summer due to what I read on the internet very low unemployment rate and good salaries. The minimum wage is a joke while the rent is super expensive food is more expensive than in the UK.
According to me, real estate market is experiencing a real “uncommon” performance.
As far as I know, the rental market had the fastest growth (the property market had not, at least not so high).
There are 2 main problems = 1) the net cost (monthly fees are excessively high compared to the supply of apartments), 2) the displacement effect (having an apartment to rent is much more convenient than other types of investment – hence this phenomenon affects also third sectors, like investment in factories or public bond issuance).
Setting an upper cap for rental prices probably can face both the problems shown above, although it may be understood that this may be difficult to be implemented (a householder will experience a net loss in its expected reward and in any case the cost of replacement of its invested capital).
Although I do not agree with the government program of subsidised rent, because it exacerbates the displacement effect shown above at point 2).
According to me, at most within 5 years real estate market will drop down (unless any reliable changes will take place) because usually in other countries like Spain or Italy that was the timeline of their last real estate market crisis (as a consequence of the 2008 recession crisis).