22 MAY 2002
Property & Construction
Real estate prices rise 5%, in line with retail price index
Real estate prices had risen by some five per cent last year, according to data recently released by the Central Bank of Malta. However, the bank adds that the rise was only slightly more rapid than that in the RPI.
The increase was also slower than that recorded in 1999 and 2000, and
was mainly concentrated in the central region of the island. Over recent
years the demand for residential property has shifted away from terraced
houses towards flats and maisonettes.
House prices had doubled between 1993 and 1996, a time span that was followed by a short period of relative stability, as the property boom came to an end. But the upward trend resumed in 1999, though the rise of these last years was more moderate than the double-digit growth of the early nineties.
Movements in property prices are monitored as they may lead to an increase in underlying inflationary pressures, the Central Bank monitors trends through an index of asking prices for property, stratified by type and locality. This approach, however, has a number of shortcomings as asking prices are usually higher than contracted prices, and properties placed on the market at different points in time may not be strictly comparable.