Property rental market at Malta under Covid-19
The rental market slowed down considerably when the pandemic reached Malta
Growth in rental rates during 2020 has slowed down considerably comparing to 2019, although it remained elevated from a historical perspective, according to research carried out by economists at the Central Bank of Malta.
The picture that emerges is that the impact of the pandemic is mainly being felt in the holiday rental market. Property owners are opting to look for more secure long-term rentals given the uncertainty surrounding inbound tourism.
COVID-19 led the annual growth of rental rates to turn negative during the first quarter of 2020. The rental rates were between 3% and 3.5% lower than they had been during the corresponding quarter of 2019. The same trend continued in the second quarter of 2020, with rental rates decreasing by 11%.
The drop-in rates was mainly driven by a combination of reduced demand for and increased supply of rental units on the market. The biggest drop in prices was noted at some of the Northern luxury developments, a reverse of the increasing rental rates noted during the last few years.
Some of the findings by the Central Bank of Malta:
• Penthouses generally attract a premium of between 23% and 27% when compared to apartments.
• Most of the properties advertised for rent are two-bedroom (40%) and three-bedroom (46%) properties. Around 12% of listings have only one bedroom, while a very limited number of properties (just under 2%) come with four or more bedrooms.
• Rental rates for two- and three-bedroom units stand at around 35% and 65% higher than the benchmark one-bedroom unit.
• The number of properties advertised as having a garage, garden or pool amounted to 3%, 1%, and 2%, respectively.
• A property close to a seafront commands a 15% premium, while the availability of a garage carries a premium of 13%.