Property prices in Malta register decrease during COVID-19 pandemic, study shows

69% of properties in Malta were valued at a lower price during the first quarter of 2020, in comparison to the last quarter of 2019, a study has shown.

The study, carried out by property portal Djar and audit firm EY Malta, revealed that the majority of properties on the real estate market in Malta registered a downward trend.

On the other hand, property prices in Gozo actually increased during the COVID-19 pandemic, with a 0.2% increase over previous quarter.

The report showed that 69% of properties were advertised at a lower value than in the first three months of 2020, up from 38% in the 2018-2019 report.

The localities with the greatest price decrease were Madliena (-1.05%), Senglea (-1.03%) and Valletta (-0.76%).

The report also showed that the Northern Harbour region area had the highest supply of real estate, with Birkirkara, Gzira, Pietá, St Julian’s, and Sliema having around 17,200 properties listed on the market.

The area also holds the highest price per square metre for both houses, which sell at about €3,200 per square metre, and apartments which can fetch €3,000 per square metre.

The lowest supply can be found in the Western region, with only around 4,500 properties listed in Attard, Rabat, Lija, Dingli and Zebbug.

“This downward shift started in the last quarter of 2019 — due to changing demands, an increase in supply, and prolonged political uncertainty that dented Malta’s reputation with foreign investors — has been further compounded by the coronavirus,” Djar CTO Keith Galdies stated.

He said the real estate sector was among the worst hit by the pandemic, with cancelled physical viewings due to social distancing, fear and movement restrictions; investors ’lack of appetite to finalise transactions; and the challenge of securing loans as banks withdrew a number of approved sanction letters.

“A sample of the properties which changed price between Q1 and Q2 is showing that 61 per cent dropped their asking price, clearly showing vendors’ appetite to secure a quicker sale.”

The last three years’s “bloated prices” have also resulted in a longer time to sell houses, with the average duration property is listed on the market at around 370 days.

The study indicates that property prices’ growth came to a near standstill during the first quarter of this year, with an average price change of -0.16% being recorded over the previous quarter.

The study’s uniqueness in analysing property prices is its machine-learning techniques and manual crosschecks to increase accuracy, bringing about more transparency into the market.

“What’s unique about this study is that unlike the figures released by the National Statistics Office and the Central Bank of Malta, Djar has the technology to provide the latest data on what’s happening in the real estate market, right up to the previous day,” the statement read.