Residential property prices drop in the first quarter

Property prices registered a drop in the Central Bank index of advertised residential property prices, and the National Statistics Office’s property price index, which is based on contracted property prices.

According to the Bank’s index, after having dropped at an annu­al rate of 2% during the previ­ous quarter, advertised property prices decreased by 2.6% year-on-year during the quarter under review.

The overall drop was primarily due to lower ask­ing prices for terraced houses, declining for the third consecutive quarter and falling by 6.1% on a year earlier.

Prices in the “other” category, which consists of townhouses, houses of character and villas, fell by an annual 12.8%, a similar drop to that experienced in the previous quarter. Moreover, prices of maison­ettes contracted marginally.

On the other hand, prices of apart­ments – which make up almost three-fifths of properties surveyed – rose by 1.0% on a year earlier, softening the drop in overall prop­erty prices. During 2010, prices for apartments had risen in the first three quarters, before falling slightly in the final quarter.

In the first quarter of 2011, the number of properties advertised for sale contracted by 9.9% on a year earlier, compared with a 12.4% decline in the December quarter.

Meanwhile, the number of build­ing permits issued by the Mal­ta Environment and Planning Authority rose by 25.4% on the corresponding quarter of 2010, mainly due to a base effect as the number of permits issued in that quarter was particularly low.

The increase was mostly due to apart­ments, for which a substantially higher number of permits were issued. On the other hand, there was a fall in the number of per­mits for the construction of mai­sonettes and terraced houses.

The latest All-Property Price Index published by the NSO, shows that residential property price inflation turned negative in the first quarter of 2011, after four quarters of consecutive price increases.

The increase in the Index peaked at 3.0% in the third quarter of 2010, before moderating to 0.6% in the following three-month period. Prices subse­quently dropped at an annual rate of 3.5% in the first quarter of 2011. This primarily reflected a 2.0% fall in the prices of apartments, while those of maisonettes declined by 9.8%.

NSO data also show that the number of sale contracts of residential property increased by 7.1% on a year earlier, after having declined on an annual basis for three consecutive quarters. The number of contracts for the sale of apartments went up by 6.0%, while contracts for maisonettes rose by 4.2%.