Sunny Side Up
Escaping leaden skies for sunshine and sparkling blue seascapes is a tempting prospect in the current climate. Throw in the promise of solid capital growth and a quality lifestyle however, and the investment picture starts to look a whole lot more interesting. Cue Malta – the bijou island antidote to the residential tourism malaise seeping across the Mediterranean cosmos at present.
A Eurozone member since 2004, unlike fiscal miscreants Greece, Spain and Ireland, the country has kept its economic head above water during the past five years. The construction industry, in parallel with the rest of Europe has felt the bite of the recession, but residential growth of late has been reflective of a prudent philosophy filtering across all areas of economic activity: a flight to quality, with high value-added real estate development leading the way.
“The success of trail-blazing projects such as Tigne Point and Portomaso are encouraging construction firms to form and emulate this type of residential project,” explains Douglas Salt Director of leading national agents Frank Salt Real Estate. “Infrastructure and restoration initiatives such as the avant-garde remodelling of the Valletta Waterfront are also drawing fresh interest from both domestic and overseas buyers. Malta’s financial system has emerged relatively unscathed from the international financial crisis, while Maltese banks have continued to offer home loans to foreigners, all of which is helping to sustain investor confidence.”
Prospective buyers will find that property prices also represent excellent value compared to many rival destinations. The dip in prices in 2008 and 2009 is providing a choice of high-quality homes at reasonable prices in both finished form as well as developments currently under construction including Fort Cambridge in Sliema and Pendergartens in St Julians where prices start from as little as £134,000. “The level of activity in the construction sector remains high despite the current slowdown in price growth,” adds Salt. “But the island offers much more besides – fundamentals such as good transport links and a superior quality of life continue to underpin its popularity. So too, do close ties with former colonial power Britain, and the Maltese Permanent Residents Scheme which has seen a steady stream of expats setting up home on the island. Foreign residents have no tax levied on their worldwide income or wealth and are subject to a flat income tax rate of 15% on remitted income. Stamp duty is also low, and pension funds are easily transferable, which makes relocation an attractive proposition.”
One inspired real estate initiative attracting foreign buy-in has been the creation of Special Designated Areas (SDA’s); government approved regeneration zones of which waterfront and marina developments are a key component.
Malta’s Environment and Planning Authority (MEPA) has done a rigorous job in nurturing the initiative since its launch in 2003. Portomaso in scenic St Julians was the first resort, but many more have come on stream with their own individual personality and style ranging from tranquil hillside retreats such as Madliena Village in historic Gahrghur to uber-trendy loft residences in Ta Monita in Marsascala. Prices start in the region of £130,000 for a one-bed apartment, to £1m+ for a luxury penthouse, but annual rental returns of between 4-5% are achievable, with the added bonus of a turnkey set-up with luxury of on-site amenities and full property management services on hand.
Those in the market for a traditional property will also find a bounty of character homes to choose from; many located in secluded rural village settings such as Gharghur, Naxxar, Rabat and Lija. Characterised by their charming tree-lined squares, and alfresco cafes and restaurants, villages sport a healthy mix of restored townhouses and maisonettes, not to mention a healthy sprinkling of vintage palazzos complete with inner courtyards, mosaic pools and roof top terraces. A budget of £150,000 – £250,000 will secure you a house of character with period accents such as flagstones, arched ceilings and exposed beams. “Older properties have a scarcity value,” adds Salt. “Period homes are not only irreplaceable, they also offer good value for money and are actually designed for the climate.” If more land is required, the verdant hinterland offers a good stomping ground for farm steadings and rural estates, many with enough acreage to allow for a swimming pool and separate guest accommodation. A sumptuously finished farmhouse with pool and deck area can be picked up for around £400,000.
Source: The Good Property Guide; article written by Laura Henderson