Pandemic effect: lowest number of dwellings approved since 2019

Statistics published by the Planning Authority show that 7,578 dwellings were approved in 2021, down from 7,837 in 2020 – a decrease of 3.3% and a sharp 39% from 2019, when the PA had approved 12,485 dwellings.

The fall in permits issued for new homes during the two pandemic years followed two record years in which the PA approved 25,370 new dwelling units.

This represented the first notable decrease in approved dwellings since 2013, when only 2,707 permits for new dwellings were issued. Between 2013 and 2019, the number of newly-approved dwellings shot up by a staggering 374%.

The new dwellings approved in 2021 included 6,451 apartments (down from 6,737 in 2020), 738 maisonettes (up from 726), 290 terraced houses (down from 297) and 99 villas or farmhouses (up from 71).

The decrease in approved dwellings in the past two years coincided with an economic slowdown in the wake of the COVID pandemic but according to industry sources this also reflects a ‘cooling-off’ period following an all-time peak in 2018 when a record 12,995 new dwellings were approved. Moreover, this drop in the number of permits issued will not be felt on the ground because many of the new apartments approved before 2020 are still being constructed.

But despite the decline, the number of permits for new dwellings issued in 2021 remains higher than that issued in any single year between 2008 and 2016.

Statistics show that permits for new dwellings shot up from 3,970 in 2000 to peak at 11,343 in 2007. Subsequently, the number of permits declined to just 2,707 in 2013 to rise to 7,508 in 2016.

The surge in approval of new dwellings between 2005 and 2007 coincided with a relaxation of building heights in urban areas. It also coincided with Malta gearing up for adoption of the single European currency, when more people started channelling their undeclared money into property development, fuelling a property boom.

The surge in permits after 2015 coincided with a relaxation in planning regulation through design guidelines which effectively superseded height limitations enshrined in local plans, and higher rates of economic growth, which contrast with the economic downturn between 2008 and 2013.