Malta property prices soar

Canny investors who have bought properties in Malta will be celebrating after research revealed that houses on the Mediterranean island had experienced the highest price growth of all the countries in the EU.

A new report from the European Mortgage Federation shows that property prices in Malta grew by more than 18 per cent, better than the likes of Spain and France.

Malta's strong performance looks set to continue, with properties already enjoying a good performance in the first quarter of 2006.

According to Tribune Properties, which specialises in Maltese homes, there has been a lot of interest in the market, especially at the top, more lucrative end.

Tribune's managing director, Michael Johnson, said: "The first couple of weeks of January were slower than the same period last year, but since then the number of sales has matched last year – a very good one – but villas with an asking price of a million euros and more have seen increased activity, and a good number of sales."

One of the contributing factors to Malta's property fortunes has been the changing shape of its economic landscape.

A new 'Smart City' is in the pipeline, which could see Malta competing with the rest of Europe as a business destination for internet and other high-tech companies.

Thanks to the relatively low wages of the country's workforce, it is hoped this could help draw in investment and around 5,000 new jobs, thus further aiding property inflation.

Tourism is another important component of Malta's economy, and this is set to grow with the introduction of low-cost airlines, increasing the number and variety of visitors to the country.

While Malta's property market has been booming, countries like Germany and Austria saw their house prices drop.