Minimum income to access housing market increased by €5,000 in just two years

The minimum required income for a young individual to purchase a €225,000 two-bedroom apartment has increased by at least €5,000 in just two years, a study found. 

The figure is part of a study commissioned by the Foundation for Affordable Housing (FAH) which found a fledgling “stretched class” in the housing market. The stretched class refers to people with a stable income and who do not depend on welfare, but still find it difficult to access the housing market.

The study shows that the existence and growth of the stretched class come as no surprise when one takes into consideration the rapid increase in minimum income to access the property market.

While an income of between €20,000 to €25,000 could buy a young individual a €225,000 two-bedroom apartment in January 2021, the rapid rise in housing prices means that the same apartment could only be purchased with an income of between €25,000 to €30,000 in January 2023. This burden increases notably the older a potential buyer is, as potential property buyers in their 40s require a minimum income of more than €35,000 annually to purchase an average-priced housing unit.

Among other findings, the study also found that 13,000 households were overburdened by their housing costs in 2022, as this exceeded 30% of their disposable income. Despite this, Malta still retains the lowest housing overburden rate in European countries.

In order to address the housing needs of this growing number of people, FAH plans to step in as a social purpose foundation in order to develop affordable housing programmes. 

In fact, FAH plans to unveil its first initiative to ease the financial burden for people struggling to purchase property in the coming weeks. The Foundation was set up in 2022 by the government and the Archdiocese of Malta specifically to tackle affordable housing.

FAH sees itself as “the third sector” in terms of the property market, finding itself between the private property market and government.