The International Monetary Fund’s assessment of the Maltese housing market, confirms the “strength and stability”of the property sector, the Malta Development Association said.
“The IMF’s assessment of the Maltese housing market confirms what the MDA has been saying for several years,” the association said in a statement.
The IMF report found that current data does not suggest overvaluation in the property market, noting that price increases have been in line with income growth in recent years. The international body pointed out that the house price-to-income ratio has stabilised since the early 2020s.
A study commissioned by the MDA itself in November showed property prices had risen by 59% since 2017, increasing by about €14,800 every year. That report noted that property price growth had substantially outpaced income growth, with the price-to-income ratio expected to rise from 14.0 in 2024 to 14.5 in 2025.
The IMF experts argued that the likelihood of weakening in the property and housing markets is currently low. This view aligns with that of local authorities, who stated that risks associated with the housing market were very limited, as real estate valuations remain broadly aligned with underlying fundamentals.
The report concluded that banks are resilient with strong capital and liquidity, while local markets show no signs of financial stress. The IMF also commended the proactive measures to safeguard financial stability that have been introduced in recent years.
As a result, the IMF stated that Malta’s baseline projections exhibit strong fundamentals. Central Bank stress tests show that domestic banks have sufficient capital and liquidity to withstand even severe shocks, the report noted.
The IMF report concluded that the Maltese economy will continue to grow by 4%, a much faster rate than the rest of the EU. Since 2013, GDP per capita in Malta has nearly doubled and now stands far higher than the EU average. Unemployment is also expected to remain at a historic low, suggesting that the housing market will remain buoyant and continue to generate wealth for Maltese families.