Property market could be in for trouble this year, fears KPMG

Promise-of-sale agreements were down 22 per cent last year, with consultancy and audit firm KPMG saying the drop is of “some concern”.
KPMG, part of the accountancy world’s big four, flagged the slowdown in property deals in a January economic outlook report for Malta.

A total of 11,086 promise-of-sale agreements involving individual potential buyers were registered last year, down by 22% when compared to 2021.
KPMG said the drop was persistent across most months and spanned property deals involving both households and firms as potential buyers.
Last year, the number of final deeds involving households as buyers fell by 1.6% but the value of the properties sold increased by 4.5%.
Rise in interest rates could hit costs
The property market could be in for further turbulence this year, with KPMG warning that any increase in interest rates for property loans would increase property costs and reduce the amount a potential buyer can borrow, resulting in a decrease in demand.
A hike in rates will also make existing loans less affordable, as the monthly repayments will also increase.

Maltese banks have yet to react to a series of interest rate hikes by the European Central Bank (ECB),...