Issue link: https://maltatoday.uberflip.com/i/1543552
PROPERTY has long been seen as a safe and almost necessary invest- ment for any person to make, but as prices continue to climb steadily, more people are feeling priced out of the market. However, BOV chair- man Gordon Cordina says the prop- erty market is safe so far because the growth rests on fundamentals. For Cordina, price growth of 4-5% annually, broadly in line with GDP expansion, is reasonable from a purely economic perspective, but he acknowledges that just because it makes sense economically, it doesn't mean it will feel reasonable to first- time buyers facing larger loans and longer repayment horizons. He steers clear of using the term "bubble" to describe the property market, as that would imply price inflation driven solely by expecta- tion. He says Malta's increases rest on fundamentals: Economic growth, liquidity and diversified employment supporting mortgage repayments. Liquidity is central to his argument. He says Maltese households also hold substantial deposits and government securities, reducing the risk of forced property sales that might destabilise prices. Moreover, mortgage expo- sure is indirectly diversified across sectors because repayment capacity depends on employment income, not property values alone. Property risk looks contained, but cyber risk keeps bankers vigilant. He says modern banks no longer just take deposits and issue loans, but they also police financial crime, de- fend against digital threats, and in- creasingly shoulder responsibility for environmental impact. Climate risk is now also embedded in regulatory scrutiny, particularly from the European Central Bank. Scenario modelling goes far beyond storms like the recent Storm Harry, encompassing sea-level rise, pro- longed drought and systemic climate shocks. Cordina says climate mitiga- tion efforts will be slow to show re- sults, but adapting to climate change through stronger infrastructure and better construction standards is ur- gent. Zooming out, Cordina frames Mal- ta's broader economic model as a balance between growth and resil- ience. A small island at Europe's pe- riphery has survived, and prospered, by cultivating multiple independent sectors, including tourism, special- ised manufacturing and services. The secret sauce is making sure none are so dominant that a single shock could bring the system down. Gordon Cordina: 'Malta's property market is driven by fundamentals, not speculation' Bank of Valletta Chairperson Gordon Cordina pushes back against fears of a property bubble and tells Nicole Meilak Malta's economic model balances growth with resilience. He says modern banks now battle cybercrime and climate risk as much as financial shocks 4 maltatoday | SUNDAY • 1 MARCH 2026 INTERVIEW