CBM Quarterly Review - Property prices drop at slower rate

Residential property prices

The Central Bank of Malta’s index of advertised residential property prices declined by 2.5%,year-on-year, during the September quarter. Following a drop of 6.0% in the second quarter and 9.9% in the first, the third quarter’s relatively modest fall in the index appeared to indicate that the recent negative trend in property prices was reversing its course. Concurrently, the number of advertised properties -- a further indicator of supply conditions in the housing market dropped by 24.1%, following a 28.0% decline in the June quarter. Meanwhile, the number of building permits issued by the MEPA was down by 38.9%, year-on-year, in the third quarter.

Lower asking prices were reported in half of the eight categories covered in the Bank’s survey.
The largest contributors to the overall decline were flats in shell form and finished flats,with a fall in asking prices of 7.0% and 2.9%, respectively. These categories together make up more than half of the monitored properties.Reductions of 4.2% and 8.9% were also registered in asking prices of finished maisonettes and townhouses, respectively. On the other hand, demand for terraced houses appears to have remained buoyant as asking prices increased by 3.4%. This was also the case with houses of character, villas and maisonettes in shell form, whose prices rose by 5.6%, 4.0% and 5.6%,respectively.

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