June sees higher value of property change hands despite fewer sales

A total of 1,169 final deeds of sale for residential property were registered in June, 70 less than the number recorded a year earlier. However, the value of these deeds totalled €274.4 million, 9.1 per cent higher than the corresponding value recorded in June 2021.

Fewer properties selling at higher prices is good news for developers and realtors, although this will be of little comfort to first-time buyers struggling to get on the housing ladder.

A study by audit and advisory firm Grant Thornton and real estate agents Dhalia released at the end of last month showed that prices have roughly doubled in just nine years.

The market is still being largely driven by individual buyers, who were responsible for the vast majority of both the number (92.6) as well as the total value (81.5 per cent) of transactions in June, according to the National Statistics Office’s (NSO) latest release.

Gozo and the South East (Zabbar, Xghajra, Zejtun, Birzebbuga, Marsaskala and Marsaxlokk) were the most popular regions, with the latter also being the region registering the second highest increase in transactions (14.6 per cent), after Birgu, Isla, Bormla and Kalkara, which saw a sharp increase of 66.7 per cent in the number of transactions recorded.

The market has yet to reach the same level of activity as that seen last year, with promises of sale registered in the second quarter of 2022 still 6.6 per cent lower than in the same period of 2021.

During the pandemic, the Government introduced a number of incentives, including a reduction in the stamp duty levied on property transfers, to stimulate the housing market. These efforts paid off, with 2021 seeing close to €1 billion additional deals being closed over the preceding year.

Industry stakeholders have pointed to the success of these incentives in creating a hot housing market as the reason behind the reduced rate of deals being closed in 2022.

“What we are seeing with this drop in promise of sale registrations is a natural consequence of the end of this incentive,” said Malta Developers Association president Michael Stivala.

Earlier this year, Finance Minister Clyde Caruana announced that the deadline for the promises of sale benefitting from the incentives was being extended to 30th September 2022.