The property price bubble in Malta : what will happen?

Abstract

Purpose: There has been recent fluctuations in demand and supply of property in Malta, with many new projects being introduced and high-rise buildings being projected some people argue that these will negatively effect property while others look at these projects as a breath of fresh air and the way forward for the property market. This has created uncertainty in the property market with the belief of many that the property Market is going to stall in the coming years. It has also created mixed feeling with some people believing that the property market is overpriced while others believe that the property market in Malta cannot get cheaper due to its scarcity. The aim of this study is to analyse similarities between factors present in the U.K. and Ireland property markets before their property crises to current factors present in Malta. The study will also look at demand and supply factors, which are affecting current prices of the Maltese property and try and understand what the general public thinks will be the way forward for the property Market in Malta. The property market is Malta’s main asset and the whole economy is greatly affected by what happens to it. The property market has a domino effect on the economy and affects the whole business cycle. Design: Data was acquired through previous thesis’s, a variety of articles obtained from the internet (Central Bank of Malta, newspaper articles, the times of Malta, real estate agents websites and more), a questionnaire handed out to the general public. The results were the analysed and reviewed. Findings: There is a degree of speculation present in the Maltese market and the market is in a booming phase. Conclusions: There are no alarming factors that we might experience a bust any time soon in the Maltese property market however the boom has to be controlled and assessed as it evolves. Value: This dissertation will be of great value to obtain a better understanding of the Maltese property market and the connection it has with the business cycle. It will of interest to real estate agencies, property consultants, the central bank, homeowners and by the whole industry.