Malta registers sharpest drop in house prices across EU

Tista' taqra bil- Malti.

Malta registered the biggest drop in house prices within the EU during the first three months of 2020, bucking what had been a generally upward trend in the 27-nation bloc.

Eurostat figures show that house prices fell by 4.3% in Malta during the first quarter of 2020 when compared to the previous quarter, a drop significantly higher than registered anywhere else in the EU. Hungary was a distant second with a drop in prices of 1.1%, followed by Ireland (-0.8%) and Belgium (-0.1%).

House prices rose in all other 23 EU member states, leading to prices increasing by an average of 1.2% in the EU and 0.9% in the euro area. The highest quarterly increases were registered in Portugal (+4.9%), Estonia (+4.8%) and Slovakia (+4%).

Nevertheless, Maltese house prices in the first three months of 2020 remained higher than they had been in the corresponding period of 2019, rising by 5.6% over 12 months. This figure is slightly higher than the average increase recorded in the EU (+5.5%) and in the euro area (+5%).

The highest annual change in house prices was recorded in Luxembourg (+14%), followed by Slovakia (+13.1%) and Estonia (+11.5%). During the same period, house prices only fell in Hungary, by 1.2%.

Apartment prices main contributor to price decrease

The Eurostat figures were based on the Property Price Index as compiled by national statistics agencies: the National Statistics Office in Malta’s case.

The NSO’s own figures, published concurrently, show that the PPI stood at 125.14 during the first quarter of 2020, up from 118.53 in the first quarter of 2019 but down from a peak of 130.81 recorded the last quarter of the year.

The drop is mainly due to changes in the prices of apartments: as far as apartments are concerned, the PPI fell from 132.06 to 125.53.

The figures also tally with the findings of a report published by Djar and EY Malta late last month, which showed that during the first quarter of 2020, 69% of advertised properties were being advertised at a lower value than in the previous quarter. This compares to 35.5% in 2017-18, and 38.5% in 2018-19.

Djar CTO Keith Galdies attributed the downward shift to “changing demands, an increase in supply, and prolonged political uncertainty that dented Malta’s reputation with foreign investors.”