Residential property prices increase in the second quarter of 2013

The price of residential properties rose at an annual rate of 1.1% in the period between April and July 2013, which followed a drop of 0.6% in the previous quarter.

The annual increase, based on the Central Bank's property price index, masks diverging movements in prices of the different categories: while maisonette and apartment prices increased, prices of terraced houses and the "other" category, which consists of town houses, houses of character and villas, dropped.

Prices for apartments which make up almost three-fifths of properties in the sample, rose by 2.2%. This reverses the 2.4% fall in apartment prices in the first quarter of the year.

On the other hand, advertised prices in the "other" category dropped by 8.0%, which followed a rise of 4.9% in the previous quarter. The fall primarily reflected a decrease in prices for houses of character and town houses. Prices for villas also dropped but to a lesser extent.

Meanwhile, asking prices of maisonettes increased at a faster rate when compared with the first quarter of 2013. Between March and June 2013, they rose by 15.5%, a much higher rate of growth than the 2.3% registered in the first quarter. On the other hand, prices for terraced houses declined by 2.6%, after a rise of 4.1% in the previous quarter.

Activity in the housing market is measured by the number of advertised properties captured in the bank's survey and by permits approved for development. In the second quarter of 2013, after seven months of decline, the number of advertised properties in the CBM's survey increased, going up by 0.3% on a year earlier after a 12.4% drop in the first quarter.

The overall rise mirrored significant increases in adverts for maisonettes and houses of character, which outweighed a fall in the number of apartments advertised.

Meanwhile, the number of building permits issued by MEPA fell marginally by 0.2%, a much lower fall than the 27.3% drop in the previous quarter. The June quarter's decline was due to a lower number of permits issued for apartments.

In contrast, the number of permits granted for maisonettes, terraced houses and those in the "other" category rose.