Under 40 And Want To Buy A Decent Place In Malta? You Need To Earn Around €25,000
If you’re under 40 and make less than €25,000 a year, then you’re likely to find it extra hard to qualify for a home loan for an average-priced property, a new Maltese study has found.
The Foundation for Affordable Housing released a report with a host of numbers and stats on housing in Malta, figuring affordability trends during what many have declared a cost of living crisis.
One thing that this study found is that young individuals, especially those aged 20 to 25, with annual incomes below €25,000 are finding it increasingly difficult to qualify for home loans for properties, mainly apartments, costing an average amount of €225,000.
Meanwhile, if you’re aged over 40 then you’d need an annual income of around €35,000 to qualify for a home loan with ease – for a property incurring the same costs.
On the other hand, the report states that Malta has some of the lowest overburden rates in Europe with 10% as opposed to the 20% EU average.
An overburden rate looks into whether the inhabitants of a property spend 40% or over of their disposable income on housing costs.
However, digging deeper into these numbers, the study found that more than 13,000 households in 2022 incurred housing costs exceeding 30% of their disposable income, doubling the figure from just four years earlier.
This trend particularly affects those in rented accommodation and more significantly young tenants, single individuals, and lone parents, as well as a low percentage of homeowners subject to a home loan.
This brings into focus the inadequacies of the current market in catering to the housing needs of low- and middle-income individuals, the report states.
“The findings underline the existence of a stretched class – persons who notwithstanding their regular stable income from employment, still find it hard to access an adequate home for their family. This calls for direct attention to this specific class, which may be provided access through the building of a social market,” CEO of the Foundation for Affordable Housing Jake Azzopardi said.
“The study further stresses the importance of our goal to integrate a social enterprise into the housing market, providing long-term, viable solutions for those inadequately served by existing systems.”
The foundation essentially called for a mixed model of private and public funding where non-profit maximising organisations can offer affordable housing options without solely depending on public resources.
This study marks the beginning of a series aimed at deepening the understanding and creating a robust discourse on sustainable housing solutions
In case you don’t know about the Foundation for Affordable Housing, it’s a social purpose foundation set up in 2022 by the Government of Malta and the Archdiocese of Malta, with the principal aim of developing affordable housing programmes.
The management of the Foundation is entrusted to a Council of Administrators wherein each Founder, i.e. the Government and the Church, is represented by an equal number of representatives. Therefore, while the Government is one of the founders, it does not own a majority shareholding, and the Foundation acts autonomously from the central administration, including the Ministry for Social and Affordable Accommodation and the Housing Authority.
As a non-profit, the Foundation reinvests any surplus into its social objective of developing residential properties and financial instruments. These efforts aim to assist individuals whose income disqualifies them for social accommodation but is too low for unassisted property purchase or lease.
What do you make of these numbers?
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