Malta offers a healthy market in which to invest by virtue of its well established tourist industry and a stable economy. Although the property market slowed at the end of 2003 around the time of the budget, Malta’s entry into the EU is expected to have a long-term, positive impact on Malta’s economy. While the tourist and second home markets expand in Malta, demand is increasing for property on the island, a highly sought after investment, and limited supply of property on this small island is driving prices upwards.
How can property be cheaper if bought off-plan? How does it work?
In order to limit financial risk and debts, the developers of any project will wish to sell units off-plan. They understand that if buyers cannot see a physical property at the beginning they will demand a lower price for relying purely on the developer’s reputation, the property location, artistic impressions and computer simulations on which to base their decision to purchase.
In addition to the excellent off-plan price, some highly beneficial finance structures are in place. You sometimes need to pay only around 10 – 30% of the purchase price in the form of a deposit, while the rest is payable upon completion. This may be financed by a mortgage if necessary.
If you decide to invest in off-plan property in Malta, you will need to decide which strategy you will adopt to achieve the best return on investment. It is important to choose the most appropriate plan, creating an investment programme suitable to your needs, whether this is “pure investment” or a “buy-to-let” strategy.
Maximising Profit From Off-Plan Investment in Malta
- Purchasing early
Prices never remain low for long and, as construction progresses, prices begin to rise steadily. In Malta, as in any other market, it is important to buy your off-plan villa, townhouse or apartment as soon as possible during the early stages of development when prices remain very competitive but are already beginning to rise. Early investors will invariably see the greatest returns.
- Purchasing the best units
Early off-plan property purchase in Malta allows investors to choose the most sought-after properties on any given development. The best units always offer higher capital appreciation in the smallest time frame and can often demand the greatest rental incomes. Penthouses are often firm favourites with investors.
- Price increases as development matures
As the development begins to be constructed, the value of the units begins to rise. A completed show home is normally available for viewing at this stage, while buyers are taking less of a risk as they now do not need to rely purely on plans.
- Price appreciates as more units sell
As more units are sold, the price of the remaining units rises. Units sell faster when buyers are able to physically see them. There is often a phase payment structure in place which mirrors the increasing value of the properties. To the early investor this means that, should you decide to sell your property, it will be worth considerably more at this stage than when you made your initial purchase and paid the 30% deposit.