Housing costs in Malta as a share of income lowest in EU for owners and tenants

Malta continues to have one of the highest shares of home ownership rates in Europe, while also having one of the highest shares of 25-34 year olds still living with their parents, according to a report on housing affordability by the European Foundation for the Improvement of Living and Working Conditions (Eurofound).

The report explores the dynamics surrounding housing affordability and adequacy across Europe, analysing both data trends and various Government incentives.

Within the European Union, Malta has the eighth highest share of home ownership, with 59 per cent owning their home without a mortgage and 23 per cent own their home with a mortgage. The rest are tenants.

The highest rate of home ownership was recorded in Romania (96 per cent) with the lowest being recorded in Germany (50 per cent).

Given Malta’s population density, the majority live in apartments, while only 43 per cent live in a house. This is similar to Spain which has the lowest number of people living in houses (34 per cent). The country with the highest proportion of people living in a house is Ireland (91 per cent).

The report asserts that an increase in tourism and foreign labour have contributed to increasing rental and property prices.

Malta also has one of the highest shares of 25 – 34 year olds living with their parents. According to data from 2019, roughly 45 per cent still lived with their parents. This is roughly a five per cent decrease from 2010, however, still remains among the highest in the EU.

The highest rate of 25 – 34 year olds was recorded in Croatia, at roughly 62 per cent, while the lowest rate was recorded in Denmark, where it increased to roughly five per cent from virtually zero.

Fortunately, the overwhelming majority of locals feel very secure in their homes, with fewer than 10 per cent saying there’s a chance they would need to leave their accomodation within the next three months, and only 13 per cent expect to face difficulties in paying utilities.

Housing costs in Malta, both for tenants and owners is in fact the lowest in Europe. As a proportion of their income, housing costs for owners is seven per cent, and 14 per cent for tenants.

While the EU average is 15 per cent for owners and 31 per cent for tenants, the situation is worst in Greece, with owners spending 31 per cent of their income on housing, and tenants spending a whopping 54 per cent.

While the Government of Malta has several schemes to encourage home ownership (sir sid darek scheme, new hope guarantee scheme, equity sharing scheme), Malta is one of the few countries without a ‘housing first’ policy.

Housing first is a homeless assistance approach which prioritises providing permanent housing unconditionally, and then additional support services which tackles the root cause of their homelessness after.

The report does note that the waiting list for social housing peaked at 3,288 households in 2017 and declined to around 800 by late 2022. However, such housing is not unconditional nor permanent.