The Property Ladder and I (2)

Read the first part of the article here

The situation is worsened by the fact that many entry-level jobs in Malta are part-time or temporary, offering little job security and even less financial stability. With an unstable income, it is even harder for young workers to qualify for a mortgage, as banks tend to require proof of a stable and sufficient income before granting loans. This has left many young people in a rental trap, where they are unable to save enough for a home deposit while struggling to keep up with rising rental costs.

Graphic: Maltatoday, August 2024

In this context, saving for a home deposit has become near impossible. With housing costs spiralling out of control and wages failing to keep up, even those young people who do manage to save are finding that the amount needed for a deposit is continually increasing as property prices soar. 

According to the 2024 budget analysis by MaltaToday, last year’s budget failed to significantly address the affordability gap. 

Although the budget included €10,000 grant for first-time buyers spread over 10 years, critics argue that the scheme falls short of offering substantial relief to young people trying to enter the housing market, given the drastic rise in property prices.

First-Time Buyer Scheme: A Missed Opportunity?

The government's First-Time Buyer Scheme has been presented as a solution to help young people afford their first home. However, many see it as inadequate and, frankly, a joke in the face of Malta’s housing reality. While the scheme offers some benefits such as tax exemptions and grants, these are simply not enough to bridge the widening gap between property prices and wages.

With apartments costing 11 times the average annual income of a single buyer, a €10,000 grant over 10 years will hardly alleviate the real financial burden young people face. The rising cost of properties means that even with this scheme, most young people are still priced out of homeownership. It fails to address the root causes of the housing crisis—escalating property prices, a shortage of affordable housing, and wage stagnation—rendering the initiative almost ineffective.

The Future for Young People

This is no longer a housing crisis but apparently, this is the norm youths are facing daily. And they say being a youth is not hard, newsflash it is.

While wages stagnate, house prices skyrocket, meaning young people are increasingly locked out of the market, threatening to financially immobilise an entire generation. The options we are left with is rent, which often results in occupancy of poor-quality housing units; or, you guessed it, living with parents.

In a recent interview with Lovin Malta Bernard Grech briefly discussed the housing crisis. Let’s face it: he can talk all he wants about affordable housing, but let’s not pretend either PN or PL has done anything meaningful to fix this mess. 

Both parties have turned a blind eye to rampant property speculation and the endless construction that’s turned our island into a concrete jungle. And don’t even get me started on money laundering—everyone knows it's a huge player in the property game, but who’s got the guts to tackle it? Spoiler alert: no one.

So, what’s next? We need more than empty promises and band-aid schemes. First off, let’s ditch the ridiculous 15% flat tax on rentals. Why should someone renting a tiny apartment for €850 pay the same tax rate as someone living in a €2,000-a-month luxury pad? It’s madness.

Scale that tax and give us a break! And while we’re at it, how about some actual incentives for renters? Right now, the landlords get all the perks, and we’re left scrambling to afford our own place.

At this rate, homeownership for people my age is nothing but a pipe dream. If the government and banks don’t wake up soon, we’ll either be stuck renting overpriced shoeboxes or living with our parents – until we’re pushing 40.