The property market in Malta has boomed over the past years, with the introduction of the controversial passport scheme and residency schemes, foreign investments have increased. Although the buying of Maltese properties by foreigners has increased this has brought its own problems.
Various issues have been propping up over the past years, especially the unsustainable increase in the property prices.
Most of the Maltese youth are increasingly finding it difficult to buy or obtain a property for themselves or in order to start a family, so most are resorting to renting properties instead. However the rents have also gone up recently, on the excuse of an increased global inflation rate. The problem is that most rents are also exaggerated and might cost a person half or more of their monthly salary.
Who Is To Benefit ?
If you are a real estate investor, a contractor or property developer then you have been doing pretty well for yourself, however for the rest of us who are just average joes then the picture is quite different. Most of the Maltese population around 60-70% of Maltese struggle to buy a property, most live with their parents into their 30’s in order to be able to afford a decent home lone.
However obtaining a loan is one thing and paying it off is another.
The biggest issue about property is the fact that wages in Malta are relatively low when compared to Europe. Malta has an average wage of 17,000 euros Gross income per annum. Although this might seem like a lot it actually is not as living in Malta is not cheap.
Wages and cost of living
It has been estimated that the average wage in Malta is in the range of 17000 – 19000 euros gross per annum, with women making approximately 3000 less than men and Gozo having lower wages compared to Malta.
A recent survey showed that on average 81% of people believe that salaries are too low to deal with the cost of living this has been causing a brain drain on the island, forcing young educated people to move out of the island in order to find better opportunities. The main reasons given by most of the respondents when asked why they wanted to leave Malta was the Salary, the environment and job opportunities.
A Changing Demographic
As time passes Malta has become more of a party island who’s main goal is that of attracting rowdy teenagers and very young tourists to the main party hub (Paceville) where most of the bars are located.
With an ever growing economy the growing economy has seen an influx of 3rd country nationals, workers from mostly India, the Phillipines and Bangladesh residing in Malta to fill in low level jobs. Where most of the jobs attracting mostly male workers in search of a better life.
This is creating a shift int the demographics were there is a majority of single men as compared to women. resulting in various social discrepancies especially when it comes to dating, socializing and meeting people. The main issue with regards to this situation is that most young people are feeling alienated and degree of communication barrier exists resulting in increased frustration and general unhappiness.
Women becoming more of a target and men ending up frustrated by the high level competition they face.
The main pastime and hobby has become eating out, drinking or working overtime in order to pay off the extensive and unreasonable loans.
Obtaining a Loan
With the average salary being what it is, a person would need to dedicate half their monthly income for a period of 20-40 years to buy the average apartment in the current market conditions.
So in order to buy property a bank loan is a must.
With the average salary of 1400 euros per month and a few savings of 12-20,000 euros a bank would be able to grant a loan in the range of 100,000, of course taking into consideration the age of the person. With the current price of apartments that would get you a small place or a 2 car garage in an area like Bugibba, Birkirkara or Santa Venera.
Of course this situation does not apply to everyone. There are many lucky people out there who just inherit a property or just have enough funds to go buy a decent property.
So where Can I Invest Money?
Leaving money sitting in the bank can be the biggest mistake you can do. Have you ever heard the term ‘Inflation’, basically that is what will eat your money up and over time your saving will devaluate.
Stocks and Bonds
Although the stock market might not be looking great at the moment, investing in stocks might be a good idea to do when these are low. Eventually if researched well enough investing in stocks that have potential might generate a good profitable margin.
Stocks like JP Morgan, Coca Cola, PepsiCo., Apple, Tesla, Warmart, Wallgreens can pay off a good dividend depending upon the amount that you have invested.
Bonds on the other hand are a debt security, they are a sort of loan that is generated from the company that issues the bond to the buyers (You). These bonds are usually issues by governments or companies and pay a stated interest rate. Bonds Can be high quality and offer low interest rates, bonds can also have long or short maturity dates.
Art Works, Wine, Collectibles
Through the development of online platforms people can now buy various collectibles like Art Work, Wine and rare vintage collectors cars in the form of shares. This can be aquired of sites like RallyRd and MasterWorks were one can invest in multi-million dollar paintings with good price appreciation over time.
ETFs and Crypto
Although the crypto market has collapsed and is not looking to recover any time soon, As we have seen in the past there is always a crash happening in the crypto scene. Usually any crash in a market is followed by a rise. This is not the exception for cryptocurrencies.
There are a variety of cryptocurrencies that have a potential for good returns in the future, just to mention a few this include Bitcoin, Etherium, Binance Coin, DeFi coins, Cardano and XRP.
So although it might seem like a shady investment, crypto can still offer good future returns.
Check out my other post on the pros and cons of living in Malta