News | Sunday, 05 April 2009

PRINT THIS ARTICLE

18% drop in promise-of-sale agreements

Confirming the decline being experienced in the Maltese property market, the number of promise-of-sale agreements decreased by 1,672 in 2008 from 9,086 – or a drop of 18%.
Promise-of-sale agreements, usually six-month conveniums signed by the seller of a property and a prospective buyer, are a general indicator of the state of the property market.
In 2007, 9,086 promise-of-sale agreements and 14,615 contracts were registered at the public registry. A year later these fell to 7,414 and 12,173 respectively.
Malta has in fact joined an international downturn in house prices after a thriving five-year run in property sales.
According to Globalpropertyguide.com, Malta is among those European states “in serious trouble” with a 9% fall in price in 2008, and is joined in this category by Iceland (16%), Ireland (12%), Ukraine (12%), Portugal (8%), France (8%) Finland (7%), Norway (6%) and Spain (6%).
Whereas in 2004 Malta’s house price index had appreciated by 17% in real terms, in 2008 it fell by almost 5%. Prices were previously inflated due to low interest rates and the tax amnesty on money repatriated from foreign accounts. By 2006, residential mortgage debt rose to 34.7% of GDP up from 19.6% in 2002.

Any comments?
If you wish your comments to be published in our Letters pages please click button below.
Please write a contact number and a postal address where you may be contacted.