“The IMF’s assessment of the Maltese housing market confirms what the Malta Developers Association has been saying for several years,” the Association said in a statement on Sunday.

The MDA highlighted that “first the IMF report states that ‘current data do not suggest overvaluation” as “price increases have been in line with income growth in recent years.’ The IMF, in fact, point out that the house price to income ratio has stabilised since the early 2020s.”

Second, the MDA said, “the IMF experts argue that ‘the likelihood of weakening of property and housing markets is currently low.‘ This was also the view of the local authorities which are reported to have stated that – risks associated with the housing market were very limited, as real estate valuations remain broadly aligned with underlying fundamentals.”

The MDA went on to say that “third, they conclude that ‘banks are resilient with strong capital…and liquidity” while “local markets show no signs of financial stress.’ At the same time, the IMF commended the ‘proactive measures to safeguard financial stability’ that have been introduced in recent years.

As a result the the MDA noted that the IMF states that ‘Malta’s baseline projections exhibit strong fundamentals.’ It also noted that they point out that ‘Central Bank stress tests show that domestic banks have sufficient capital and liquidity to withstand even severe shocks.’

The MDA argued that “rather than severe shocks, the IMF forecast that the Maltese economy will continue to grow by 4%, a much faster rate than the rest of the EU. This despite the fact that since 2013, GDP per capita in Malta has nearly doubled and now is far higher than the EU average. Unemployment is also expected to remain at a historic low.”

It claimed that “all this suggests that the housing market will remain buoyant and continue to generate wealth for Maltese families.”

“One has to welcome the fact that the IMF have decided that Maltese economy is so strong that they do not need to carry out their comprehensive economic assessment every year, but instead will be doing it every two years,” stated the MDA.

The MDA concluded by saying that “Malta is the first EU economy to be given such a certificate of economic governance, and this further cements our reputation as a resilient and dynamic jurisdiction.”

File photo: Gozo News/Alain Salvary

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