A study by the Central Bank of Malta, carried out in conjunction with the central banks of other Euro area countries, indicates that Maltese households own assets well above the European average. In fact, this study concludes that “largely reflecting the higher prevalence of home ownership in Malta, the median net wealth in Malta was estimated to be significantly higher than in the Euro area”. So much so that, on average, a Maltese family has assets of €312,000, whereas the average European family only owns €158,000.
The survey indicates that the proportion of Maltese in employment is well above the European average: 60% versus 49%. The proportion of home owners is also higher: 79% in Malta against 62% across the Euro area.
When it comes to the average value of real estate property, only households in Luxembourg have a higher value than that of Maltese households. Families in Malta have the sixth highest amount of financial assets across the Euro area, averaging almost €17,000. The Central Bank of Malta study indicates that Maltese households have the highest level of liquidity when comparing financial assets with debts. This international study also indicates that wealth inequality in our country is the third-lowest in Europe.
Furthermore, the Central Bank’s report indicates that “spending on utility bills by Maltese households stood at the third lowest in the Euro area”. This was attributed to the Government’s policy to keep the price of energy stable. As a result, around 37% of the lowest-income households stated that they were able to save, a much better rate than in other countries.
While, in other countries, home ownership rates are taking a dip, here in Malta they are remaining stable while financial assets and liquidity are remaining high. The fact that austerity politics has battered European households, but not been experienced locally, is certainly a large cause of these widely divergent trends. Able to save as a result of this economic model, Maltese households can continue to climb up the property ladder and accumulate a portfolio of assets that serves as a buffer for them.
With assets double those the average European family, Maltese families are much better able to withstand economic shocks. This enhances confidence and leads to higher domestic demand, and in turn to higher investment.