Guest Post: How The Ukraine Crisis Could Impact Malta’s Property Market
This terrifying crisis in Ukraine is also undermining the order of the Maltese real estate sector.
Russian citizens who have actively participated in the Maltese citizenship through investment program are withdrawing, and not of their own freewill, which will have an impact on the real estate market.
Prior to the events in Ukraine, Russian citizens were extremely active in the purchase of real estate but now, the activity is undeniably different. Russian sanctions will have a significant impact on the Maltese economy, potentially even greater than the consequences of the pandemic.
Oil prices will rise in the near future, stock markets will fall, raw materials will also rise in price, and inflation will skyrocket. All of these will have an impact on the real estate sector, which typically absorbs such economic events.
Having said that, Malta is a small island with a strong economy, so I don’t think that we will suffer the most severe consequences, however everyone will have to be alert and do their best.
I myself am from Albania, which was once one of Europe’s ‘forgotten’ countries but is now emerging from the shadows as one of the places where foreign buyers can invest in real estate.
Albania has a stunning Adriatic Sea coast and a thriving economy, and the elected government has committed to ridding the country of past challenges and corruption, so the future looks very promising.
Albania was able to transition relatively easily from a communist regime to a democracy. Maltese industrialists are increasingly investing in the country, and Albanian entrepreneurs are gradually discovering Malta’s potential, so my home country may be able to fill some of the void left by the loss of Russian players.
Malta, which is a member of the European Union and where English is widely spoken, appears to be an ideal place to live – and not without reason – this three-island nation is a gleaming jewel of the Mediterranean. Since this island is unique, it is not surprising that it is popular not only among large investors but also among ordinary people.
I admit that prices are a little inflated in some areas, and have risen significantly in others, such as Sliema and St. Julian’s. However, various state-guaranteed initiatives, such as our government’s most recent ambitious promises to provide loans of €10,000 to first-time buyers over a ten-year period, serve as a powerful motivator for locals to purchase their first home.
Simultaneously, there is another group of people who can afford to pay higher prices for better, more luxurious housing in a more prestigious location.
As a result, my forecasts for the next few years are very optimistic. When the real estate market is this strong and supported by the government, many locals and foreigners will undoubtedly continue to invest in property in Malta, and we will assist and advise them.
Arlent Ashiku is a property consultant.
Do you think Russia’s invasion of Ukraine could have an impact on Malta’s property market?