Over two-thirds of the advertised properties that experienced a price change in the first quarter of 2020, saw a reduction in the asking price when the COVID-19 pandemic hit, according to a new in-depth report on the Maltese market.
Compiled by Djar and EY Malta, the report found that 69 per cent of these properties were advertised at a lower value in the first quarter of 2020 compared with the last quarter of 2019; a jump from 35.5 per cent in 2017-2018, and 38.5 percent in 2018-2019.
Djar CTO Keith Galdies said: “This downward shift started in the last quarter of 2019 – due to changing demands, an increase in supply, and prolonged political uncertainty that dented Malta’s reputation with foreign investors – has been further compounded by the coronavirus.”
Interestingly, while Madliena (-1.05 per cent), Senglea (-1.03 per cent) and Valletta (-0.76 per cent) witnessed the greatest decrease during the first quarter of this year, properties in Gozo – considered as a region for the purposes of this study – saw a slight overall increase in prices of 0.2 per cent over the last quarter of 2019.
Real estate was one of the worst hit sectors characterised by cancelled physical viewings due to social distancing, fear and movement restrictions; investors’ lack of appetite to finalise transactions; and the challenge of securing loans as banks withdrew a number of approved sanction letters.
This latest data indicates the first signs of a pause in soaring property prices and a contraction in market supply, and while the full impact of the pandemic will be further analysed in Djar’s next report a quick preview of the second quarter of 2020 confirms this downward trend.
“A sample of the properties which changed price between Q1 and Q2 is showing that 61 per cent dropped their asking price, clearly showing vendors’ appetite to secure a quicker sale.”
The bloated prices of the past three years have meant that properties take longer to sell, with the average duration of housing listed on the market being as high as 370 days; just over a year.
This report, which focuses on the virus’ disruptive impact on the real estate lifecycle, is just a snapshot of the data available on the Djar platform, which has been collecting tens of thousands of web-based listings since January 2017 to gain the first comprehensive overview of the property market in Malta.
What’s unique about this study is that unlike the figures released by the National Statistics Office and the Central Bank of Malta, Djar has the technology to provide the latest data on what’s happening in the real estate market, right up to the previous day.
“This report, which uses machine-learning techniques and manual crosschecks to increase accuracy, is just one of the many we will be releasing in the coming months to bring more transparency to the market. We want buyers and sellers alike to get a 360-degree view of the latest shifts to make an informed decision,” Mr Galdies said.
A deeper look into the figures compiled by Djar shows that the Northern Harbour region – Birkirkara, Gzira, Pietá, St Julian’s, and Sliema – has the highest supply with about 17,200 properties listed on the market.
These properties also hold the highest price per square metre for both houses, which sell at about €3,200 per square metre, and apartments which can fetch €3,000 per square metre.
The lowest supply is in the Western district – Attard, Rabat, Lija, Dingli, Zebbug – with just 4,500 properties up for grabs in the area.