Throughout 2015, 13,600 promises of sales on property were carried out, amounting to nearly €2.5 billion worth of property being signed for – an unprecedented high. The next highest value was registered the year before, at €1.6 billion in 2014, however the discrepancy between 2014 and 2015 remains something to consider.
This information was provided by finance minister Edward Scicluna in parliament, replying to a question posed by Claudio Grech from the opposition. Such information was first made available in 2008 and since this year, 73,400 promises of sale on property – widely known as ‘konvenju’ have been recorded, collectively amounting to around €11 billion worth of property.
2011 was the year in which the lowest number of promises of sale was recorded – 7,800, however, the combined value of of properties being bought was still higher than that of 2009, which amounted to just under €1 billion despite 8,000 promises of sale being carried out that year.
Looking back, the trend with regards to promises of sale between 2008 and 2013 was a near constant decline. This phenomenon was a global occurrence due to the severe economic crisis that hit the worldwide economy. In speaking with CNBC about the luxury real estate market in the past years in December 2015, Sotheby’s International Realty Affiliates President and CEO Philip White stated that the global luxury real estate market experienced a crash in 2009 and is now undergoing a steady recovery. It seems that this trend is also being mirrored locally. In 2013, the market reemerged from its constant decline, reaching just over 11,000 promises of sale that year and 13,650 in 2015.
Since 2008, a total of €91 million has been paid in provisional tax at 1%. €20 million of this amount was paid throughout 2015 only, clearly reflecting the changing conditions on the real estate market. Minister Scicluna, while speaking at the second reading of the budget stated that 6,000 first-time buyers benefited from this scheme between 2013 and 2013. This scheme exempted firt-time property buyers from stamp duty on the first €150,000 of the value of property being bought and proved so popular that it had been extended.
The launch of a White Paper which will lead to a legal framework that will establish a code of conduct for real estate agents also shows that the local real estate market is rapidly expanding and is likely to keep growing in the foreseeable future.
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