With multinational, financial services and internet gaming companies setting up offices in Malta, foreigners are moving in — and housing prices are going up.
Malta’s business-friendly tax structure and sunny Mediterranean climate have attracted international property buyers for many years. Demand for homes often outpaces the limited supply on the island, which is only 121 square miles.
“There is a lot of foreign interest,” Mr. Paris said. “There has been a big surge in prices.”
Prices have been rising steadily by more than 10 percent annually for the past two years, agents say. Demand is particularly strong for traditional homes and newer homes in the countryside.
“Today it is a very mature market,” said Ian Casolani, the managing director of Belair Property, a Malta real estate agency. “Properties are becoming harder and harder to come by.”
In recent years there has been a wave of new construction, particularly in apartments along the coast. The new apartment developments are attracting more international investors, many looking to offer the property as a rental.
“The rental market has exploded,” Mr. Casolani said.
Commercial property investment activity in Europe reached its highest level since 2007, totalling €102.5 billion in the first half of 2015, the latest market analysis report shows.
The investment volume across the 16 participating countries was 25% up on the same period last year, according to the European Investment Briefing report from international real estate advisor Savills.
The pound rose to its highest rate against the euro since November 2007 on Thursday, climbing to €1.4350 at one point.
The euro fell against both the pound and the dollar as markets assessed potential interest rate moves over the next few months.
The European Central Bank is expected to maintain its loose monetary policy for some time to come.
However, markets are now waiting for rate rises in the UK and US.
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