Residential property prices drop again in the first quarter of 2013

An annual 0.6% drop in the overall Central Bank of Malta property price index during the first quarter of 2013 was driven by drops in the price of apartments, while maisonettes, terraced houses and other houses, which consists of town houses, houses of character and villas, increased in price.

Based on the Central Bank of Malta's property price index, the price of residential properties fell at an annual rate of 0.6% in the first quarter of 2013, which followed a drop of 2.2% in the previous quarter.

During the quarter under review, prices for apartments, which make up almost three-fifths of properties in the sample declined by 2.4%. This is a smaller drop when compared with the 3.2% decline in the previous quarter in 2012.

Meanwhile, advertised prices in the "other" cat­egory increased by 4.9%, which followed a drop of 0.9% in the previous quarter. The rise was driven by increases in prices for houses of char­acter and villas, as prices for town houses dropped.

At the same time, ask­ing prices of both mai­sonettes and terraced houses during the quarter under review increased at a faster rate when compared with the last quarter of 2012. While maisonette prices rose by 2.3%, those for terraced houses grew by 4.1% during the first quarter of 2013, dampening the rate of decline in the overall index.

A measure of activity in the housing market is provided by the number of advertised prop­erties captured in the Bank's survey and by residential permits approved for development. In the first quarter of 2013, the number of advertised properties in the Bank's survey fell by 12.4% on a year earlier, compared with a 7.9% decline in the previous quarter. The overall fall recorded in the first three months of the year was broad-based across all surveyed cat­egories, with the exception of houses of character and finished maisonettes.

Meanwhile, the number of building permits issued by MEPA fell strongly by 27.3% com­pared with the same period a year earlier. The decline was mainly due to a lower number of permits issued for apartments, although permits for residential properties in the "other" category and terraced houses also fell. In contrast, the number of permits granted for mai­sonettes rose by 13.6%.