Rental income for bottom 50% of earners has doubled since 2012

The bottom 50% of earners in Malta have seen their percentage share of rental income double since 2012, data provided by the National Statistics Office shows.

Earlier this month, MaltaToday reported Maltese households’ income from rent has increased by 132% between 2014 and 2017, rising from €36.9 million to €85.8 million.

According to the data, 15.4% of all rental income in 2017 went to the bottom 50% of earners in Malta, up from 6.1% in 2011, indicating that income from rent is being spread over a larger segment of the population.

A complimentary trend was noticed with the top 10% of earners, who saw their share of income from rent fall by roughly 9%, although the NSO said that the figures should be analysed with caution owing to the fact that survey responses for this category were very low.

The rental market has exploded in recent years, with those who do not own their own home struggling to make ends meet.

On the other hand many Maltese families have found themselves an entirely new source of revenue by renting out their summer apartments or by developing previously held plots of land.

In fact, the number of registered rental holiday apartments almost doubled between 2013 and 2017, rising from 1,095 to 1,986.

The NSO’s data appears to confirm what economist Philip von Brockdorff told MaltaToday earlier this month, that while rental prices had increased, the figures suggested the increase was also due to more people renting out their own property.

“Rents have increased, which contributes to the larger amount recorded by the NSO but there is also a phenomenon of more people renting out idle property they owned, such as summer homes, and others who have bought apartments to rent them out,” Brockdorff said.

Despite the increased income from rent, this made up only 1.5% of all household income in 2017. Von Brockdorff also noted that due to low interest rates, income from bank interest and dividends was less lucrative, pushing people towards the property market.

“The rental yield is phenomenal when compared to other countries and in the current low interest rate environment, the options to invest have been narrowed down, which has prompted people to buy property to let,” he said.

Share of annual rental income by bottom 50% income earners

• 2011    6.1%
• 2012    7.4%
• 2013    5.2%
• 2014    6.5%
• 2015    10.1%
• 2016    11.7%
• 2017    15.4%