Transparency and Stability at the Core of Malta’s Rental Market Growth.

The Malta Housing Authority has released a groundbreaking study that sheds light on the private rental market in Malta. With a focus on registered contracts, this comprehensive analysis aims to bring transparency and stability to an increasingly vital sector. As the third annual publication of its kind, the report provides crucial insights into the evolving dynamics of the rental market in Malta.

A key finding of the study reveals a staggering 24% increase in active registered contracts, reaching a total of 47,879 by the end of 2022. This surge signifies a growing demand for rental properties, reflecting the importance of the sector in supporting social cohesion, economic growth, and the overall well-being of Maltese society.

The report highlights that nearly 95% of active contracts are long-term leases lasting at least one year. Additionally, 5% of contracts fall under the category of shared spaces, promoting affordable housing options. Surprisingly, short-term leases constitute less than 0.5% of the registered contracts, indicating a preference for stability among tenants.

Renewals play a significant role in rent stability, with an impressive 95% of contracts renewed in 2022 maintaining the same price. A total of 21,529 contracts were renewed during the year, most of them automatically and for a one-year period. This commitment to keeping rental prices consistent contributes to a sense of security for tenants.

Since the establishment of the rent register, the Housing Authority has recorded 9,500 multi-year contracts, with 7,061 still active by the end of 2022. The median duration of currently active multi-year contracts is three years, although some older contracts extend even longer. This longevity showcases the enduring nature of these agreements.

St. Paul’s Bay emerges as the most sought-after locality, boasting approximately 7,300 active leases in 2022. Following closely behind are Sliema, Msida, Gzira, and St. Julian’s, highlighting the appeal of these vibrant areas for renters. The Northern Harbour region claims the highest concentration of active leases at 44%, with the Northern region accounting for 25%. Gozo, while accounting for a smaller portion, still represents 7% of active leases.

With 80% of rental contracts being for apartments, the demand for multi-bedroom properties is evident. Two-bedroom and three-bedroom apartments make up the majority of registered contracts in terms of size, accommodating the needs of individuals and families alike.

The study also delves into rental prices, revealing that approximately 27% of new contracts signed between July and December 2022 had monthly rents ranging from €700 to €899. Further analysis shows that 29% of recent rents exceed €1,000 per month, while around 14% fall within the €500 or less range. Shared spaces, on the other hand, witness 60% of active leases in 2022 with monthly rents ranging from €100 to €299.

Indices based on the hedonic methodology indicate that rental prices have surpassed pre-COVID levels. Gradually increasing since mid-2021, rents experienced an average growth rate of 6.6% in the second half of 2022 compared to the same period in 2021.

In terms of regional variations, the report utilizes the hedonic model to estimate the monthly rent for apartments with long-term leases in 2022Q4 across Malta and Gozo. Localities such as Sliema, St. Julian’s, and Swieqi exhibit the highest rental prices, while Gozo generally offers more affordable options for tenants.

The study also includes a section that analyzes recently published statistics on the number of foreign workers in Malta and their impact on the rental market’s changing profile of demand. This information provides valuable insights into the evolving landscape of the rental market.

Matthew Zerafa, the CEO of the Housing Authority, emphasizes the significance of this study in a time when the private rental market in Malta is rapidly evolving. He states, “Comprehensive analysis and informed decision-making have never been as important as they are now.” As a testament to their commitment to providing timely information, the Housing Authority will publish updates of this study biannually starting from this year.

With the publication of this study, the Malta Housing Authority takes a giant stride towards establishing a balanced and sustainable rental market. This invaluable resource empowers both tenants and landlords with the knowledge needed to navigate the evolving rental landscape, ensuring a brighter future for all involved.

#MaltaDaily