Rent increases in Gozo outpaced those in Malta but are still more affordable

Since 2020, rental prices in Gozo have increased by an annual average of 5.9%, significantly outpacing the 3.4% rise observed in Malta.

This trend indicates that while Gozo remains more affordable, rental prices have been gradually converging with those on the mainland.

This trend emerges from a discussion paper on the residential rental market in Gozo issued by the Gozo Regional Authority and the Housing Authority.

The study shows that the private rental market has grown significantly in recent years, with rental prices increasing at a faster rate than in Malta, despite remaining lower overall.

83% of rental contracts below €899

The report reveals that slightly more than half of long-term rental contracts in Gozo were priced below €700 per month in the second half of 2023. Another 38% of contracts ranged between €700 and €999, while just 9% exceeded €1,000 per month. Shared space rentals were even more affordable, with 89% of contracts priced under €300 per month.

Overall, rents in Gozo remain cheaper than in Malta. Around 83% of rental contracts in Gozo were below €899, whereas in Malta, only 51% of contracts fell within this price range.

Conversely, 40% of rental contracts in Malta exceeded €1,000, compared to just 9% in Gozo.

Xagħra is the most expensive locality

Two- and three-bedroom apartments in Gozo had median monthly rents ranging from €550 in Munxar, the most affordable locality, to €834 in Xagħra. In comparison, St Paul’s Bay – Malta’s most populous rental locality – registered median rents of €750 for two-bedroom apartments and €900 for three-bedroom apartments.

Rental prices in Gozo were roughly half those in Sliema, one of Malta’s most expensive rental areas.

The number of registered rental contracts in Gozo has risen sharply, with 7,478 tenants recorded in 2023, more than doubling from 2,760 in 2020. The most popular rental locality in Gozo is Żebbuġ, including the seaside village of Marsalforn. Żebbuġ is also the only locality in Gozo to surpass 1,000 active rental contracts in 2023. Other high-demand areas include Victoria, Għajnsielem, Munxar (which includes Xlendi), and Xagħra, which together account for 68% of all rental contracts in Gozo.

Sannat, Żebbuġ, and Qala have seen the largest increases in rental contracts since 2020. The number of registered leases in Sannat has tripled over this period, albeit from a relatively low base.

Composition of rental stock

Apartments make up the vast majority of rental properties in Gozo, accounting for 78% of all contracts in 2023. Houses and villas represented 15%, while maisonettes made up the remaining 7%. The rental stock is dominated by two- and

three-bedroom units, which collectively account for 85% of rentals.

The share of two-bedroom apartments has been increasing, making up 47% of Gozo's rental market, while three-bedroom units have seen a slight decline in relative share. Meanwhile, large properties with four or more bedrooms have remained stable at 4% of the rental market.

Foreign workers drive demand

The rental market in Gozo has expanded rapidly since the establishment of the rent register in 2020. The number of active rental leases in Gozo grew from 1,772 in 2020 to 4,260 in 2023, mirroring trends in Malta. Gozo's share of the national rental market has remained stable at around 7.1% since 2022, up from 6.4% in 2020.

Foreign residents have been a major driver of demand. By 2021, nearly 70% of rented residences in Gozo were occupied by non-Maltese tenants, reflecting increased foreign employment on the island. The highest concentration of rental properties is in Żebbuġ, where nearly 30% of the residential stock consists of rental units. Munxar (20%) and Għajnsielem (17%) also have a significant share of rental properties, while Ta' Sannat and Kercem recorded the lowest proportions at 7.5% and 5.3%, respectively.

Social housing in Gozo

Social housing represents a small fraction of the rental market in Gozo, with only 270 properties leased for social accommodation, making up about 4% of Malta’s total social housing stock. The majority of government-managed social

housing is located in Victoria, while privately leased properties are distributed across the island.

The average annual rent for social housing in Gozo is approximately €1,000. Around 18% of tenants pay less than €250 per year, while another 42% pay between €250 and €999. Rents exceeding €2,000 per year account for only 10% of social housing leases. Another segment of the rental market is composed of rent controlled properties with contracts predating 1995. The average age of Gozitan and Maltese tenants in rent-controlled leases is 71 and 70 years, respectively.

The study concludes by emphasising the crucial role of the government, through the Housing Authority, in regulating the housing market, ensuring the availability of adequate social housing and providing assistance to tenants residing in pre-1995 dwellings. Moreover, according to the study social housing in Gozo is primarily allocated to tenants who have previously resided on the island, challenging the perception that a significant portion is assigned to non-Gozitan residents.

The paper is authored by Juergen Attard and Brian Micallef from the Gozo Regional Authority and Bryony Balzia Bartolo and Mirhea Mifsud Cutajar from the Housing Authority.