Study finds increased convergence between Gozo and Malta property prices

The Gozo property market has been reporting persistent price growth across the island, indicating continued price convergence and increasing homogeneity between Malta and Gozo.

A property market report conducted by Djar and EY looks at the latest web-based listing for residential and commercial property markets for the first quarter of 2021.

According to the report, most residential property listings have maintained their asking prices, leading to minimal changes in the recorded avaerage price.

However, average quarter-on-quarter price changes range between -1.6% to +2% across localities, with half of all localities registering an overall average listing price increase.

The largest share of asking price reductions were recorded for the Northern Harbour and Northern regions, while persistent price growth has been seen in the Gozo property market.

In terms of year-on-year average value changes, terraced houses and houses of character have experienced the largest number of price reductions, possibly due to having been impacted harder by the pandemic given their upscale nature.

From a regional perspective, downward average price trends were mostly concentrated in the Northern Harbour region, the report said.

The report also takes a look at asking prices vis-à-vis average deed values as recorded by NSO data. While the overall average asking price within the Djar database stands at €400,000, the average deed value on contracted prices is at €200,000.

"Notwithstanding differences in the nature and components of asking and contractual price data, it appears that current trading activity may be concentrated more in particular market segments (e.g. more affordable, first-time buyer segments) within the overall market supply," the report reads.

Data provided by NSO and Djar indicates that there has been a resurgence in market activity as from the third quarter of 2020, with a rising number of transactions and increasing property volumes.

"This may be an after-effect of pent-up demand and supply which had stalled over 2020 Q2, but also a possible outcome of both development projects still introducing substantial supply to the market and re-incentivised property demand/transactions," the report explains.

The number of residential property listings remained on the rise in the first quarter of 2021, following a drop in the second quarter of 2020. 

According to the report, this increasing supply could be the result of socio-demographic factors, general market/economic sentiment, completed development projects, higher investment appetite, and market-supporting measures by government.