Issue link: https://maltatoday.uberflip.com/i/1471907
2 NEWS maltatoday | WEDNESDAY • 29 JUNE 2022 2 NEWS A house that would have sold for €100,000 in 2013 would now cost €200,000 on the local property market, according to a new prop- erty report by Dhalia Real Estate and Grant Thorton. The findings of the study were presented by economist Daniel Gravino on Tuesday, with new insights on the selling and rental house markets. According to the study, house prices in 2022 were double what they were in 2013, with fast growth recorded in the five years leading up to 2019. Higher rates of growth in the housing market were recorded between 2013 and 2018, although a marginal negative change was recorded in the second half of 2019 - a period marked by polit- ical turmoil and uncertainty in Malta. Prices began to grow steadily in the first half of 2021, but current growth rates are still far from what they were in 2016. Meanwhile, rental prices have increased by 42% over the nine- year period in question. A prop- erty that would have been rented out for €500 a month in 2013 would be rented out for €800 a month in 2019. However, rental prices suffered a decline in 2020 at the onset of the pandemic, with the majority of properties being rented out for between 5% and 30% less than in the previous year. Key insights The relative stability of selling house prices, even in a period where rental prices declined, sug- gests that people who have been investing in property believe that the dip in rental prices is tempo- rary. Additional housing supply out- stripped additional demand, put- ting downward pressure on pric- es in 2020 and 2021. This doesn't necessarily translate to a decline in prices, but rather to a slower rate of growth. The immediate future is chal- lenging. While demand is there, there is an upward pressure on prices due to high construction and finishing costs. But recov- ering demand could put upward pressure. Current market prices are "just sustainable". They will remain sustainable going forward only if both incomes and housing prices remain stable. If prices go up, in- comes have to go up. Between 2010 and 2019, addi- tional demand for housing units increased rapidly, largely a result of the increasing number of for- eigners relocating to Malta. But in 2020, incremental user demand turned negative as tour- ist activity plummeted, resulting in less demand for short-stay properties. By 2021, incremental demand turned positive again - a shift driven by first-time buyers, a growing foreign-born popula- tion, and a recovering tourism industry. However, housing supply has been growing faster than de- mand. The study looked at the number of permits for new units issued by the Planning Authority to gain insight into housing sup- ply. The number of permits in- creased substantially since 2016, with 20,000 additional units is- sued in 2018 and 2019 alone. However, it takes one to three years after the issuance of the permit for a unit to be added to the housing stock. With so many permits being is- sued, the report suggests that sig- nificant additions to the housing supply stock will be seen between 2021 and 2023. What's the outlook? The report forecasts a slow- down in additional housing supply paired with recovering housing demand. This is expect- ed to ease, but not eliminate, the current downward pressures on housing prices. However, the housing market is one of many sectors that has been hit by inflation. The average cost of raw materials for construction reportedly increased by 30% to 40% compared to the pre-pan- demic period. In addition to this, the Europe- an Central Bank is expected to raise interest rates in response to high rates of inflation, affecting the rate at which investors can borrow to finance their property purchases. The verdict: current mar- ket prices are just sustainable enough. However, housing pric- es and incomes need to remain stable together. If prices go up, incomes have to increase with it. Real estate stability In 2021, the number of final deeds and promise-of-sale (POS) agreements signed increased back to pre-pandemic levels. Gravino pointed to two possi- ble reasons behind this statistic. With the economic slowdown seen in 2020, many closed off their deeds in 2021 instead of 2020. Additionally, many proper- ty seekers sought to benefit from the stamp duty exemptions that the government introduced as part of its COVID-19 econom- ic recovery plan. This prompted property seekers to buy sooner than originally intended, as they started to anticipate the expiry of the stamp duty exemption. Housing prices now double what they were in 2013 A new collaborative report by Dhalia Real Estate and Grant Thorton show that current market prices are " just about" sustainable A man's lifeless body has been found in the sea close to Ta' Fra Ben in Qawra. A police spokesperson said the body was found by divers at around 10:30am on Tuesday. The spokesperson said initial investigations showed the corpse is not linked to a number of miss- ing persons reported to the police in the past weeks. Sharona Grima, 12, was reported missing to the police on Wednesday 22 June in Xagħra, Gozo. Another girl, Doaa Kasem, 17, was first reported missing on 16 June, and was last seen in Santa Ven- era. 36-year-old Jonathan Baldacchino was also report- ed missing on 5 March and was last seen in Attard. Police investigations are ongoing. Man's lifeless body found in sea off Ta' Fra Ben Ta' Fra Ben