Property prices rose by 59% since 2017

Property prices have skyrocketed by 59% since 2017, as prices increased by about €14,800 every year.

According to a study by KPMG and the Malta Development Association (MDA), despite the explosion in price, average apartments are getting smaller.

The report, published on Tuesday, notes that property price growth has substantially outpaced income growth. 

In fact, the report notes that the price-to-income ratio, calculated using the median asking price of apartments compared to median net income, is expected to weaken slightly in 2025, rising from 14.0 in 2024 to 14.5 in 2025. This indicates that median property prices have increased at a faster rate than median income growth.

The report also notes that access to homeownership is becoming increasingly linked to family wealth, as more than a third of first-time buyers must still rely on parental donations or other forms of family assistance to access the market. 

Despite the affordability concerns, both residential permits and final deeds of sale registered steady growth. A total of 8,716 residential units were approved in 2024, an increase of 7.4% over 2023, with permit numbers expected to surpass this in 2025. 

Apartments and penthouses consistently account for the majority of residential units sanctioned. 

According to the report, Malta’s rental market remains driven primarily by sustained demand from foreign workers. The largest share of rented homes now exceeds €1,200 per month, increasing to 60.2% of all listings in 2025 from 55.5% in 2024.

Meanwhile, the commercial office market continues to be sluggish, as the average asking rental rates for office space declined to €221 per square metre in 2025, down from €234 per square metre in 2024.

The MDA’s report stresses that construction and real estate remain pivotal to Malta’s prosperity, collectively accounting for around 9% of Malta's Gross Value Added (GVA) based on direct effects. In 2024, the wider building industry generated an estimated €3 billion in GVA when factoring in direct and indirect effects.

The report states that the construction industry faces severe labour constraints, characterised by a shortage of skilled local workers. This necessitates heavy reliance on TCNs who were reported to exhibit low retention rates. 

According to the MDA’s report, the persistent shortage contributes to rising wages in the sector, which consequently drives up property prices. As of March 2025, the building industry directly employed a combined total of 25,979 full-time equivalents (FTEs), representing 7.8% of Malta’s workforce.