Unexpected facts about first-time buyers

Just relying on economic growth is not enough to maintain strong home ownership in a country. One needs an active housing policy. The encouraging figures in this field are a result of a Housing Authority that comes up regularly with new innovative schemes.

Last year, a grant of €1,000 a year for ten years to first time buyers buying property with a mortgage was launched. A study by the Housing Authority sheds a lot of light on first time buyers in Malta, revealing a lot of unexpected facts.

The study indicates that, in the first year of this scheme, around 3,100 applications were received, amounting to 4,590 beneficiaries.

Around 73% of first-time buyers were aged between 25 and 34, with the average age being 30. A study carried out by the international bank ING indicates that, on average, in Italy and Germany, the average age of first-time buyers is about 34, or 4 years after that in Malta. Moreover, in these countries, the rate of home ownership is much lower than in Malta.

A Central Bank of Malta study indicates that 73% of those under 35 are owners of their property. This rate rises to 87% for those aged between 35 and 44. Looking at a similar study conducted by the Central Bank of Italy in Italy only 61% of those under 35 are home owners, with the rate rising to just 69% for those aged between 35 and 44. 

Meanwhile, the Housing Authority study indicates that just over half (52%) of first-time buyers in our country were single. 55% of first-time buyers were men.

First-time buyers who bought as a couple purchased properties worth more than those purchased by single first time buyers. Almost three in five single first-time buyers bought a property worth between €150,000 and €250,000, while two in five first-time buyer couples bought a property in this bracket. Almost a third of first-time buyers bought a property worth more than €300,000.

In total, first-time buyers bought in 66 localities around the Maltese islands. The places that were most popular with first-time buyers were St Paul’s Bay (191), Żurrieq (185), Birkirkara (177), Mosta (166), and Żabbar (148). Around 7% of first-time buyers were in Gozo.

Almost half of the properties purchased were in the same locality, or close to, the previous address of the first-time buyer. This preference is stronger in Gozo, with 72% of Gozitan first-time buyers buying property in Gozo. This could also reflect the fact that property in Gozo, on average, appears to cost between €50,000 and €100,00 less than that in Malta.

The statistics compiled by the Housing Authority indicate that 79% of first-time buyers who were single purchased an apartment. In contrast 65% of first-time buyer couples bought an apartment. When it comes to couples, there were 18% who bought a terraced house or house of character, and the rest bought a maisonette.

Only 2% of first-time buyers bought on plan, and 24% chose a shell property. This means that a large majority of first-time buyers have purchased a finished property.

The broader picture

These results need to be viewed within a much wider context. A recent article in The Guardian points out how, despite full employment and very high economic growth in Ireland, the home ownership rate fell from 79% in 1991 to 66% now, and that today less than a third of 30-year-olds are home owners. As a result, in the spring 2023 Eurobarometer 61% of people in Ireland stated that housing was one of the two most important issues facing the country.

This shows that just relying on economic growth is not enough to maintain strong home ownership in a country. One needs an active housing policy. The encouraging figures in this field are a result of a Housing Authority that comes up regularly with new innovative schemes to target pockets of society facing issues, besides embarking on some of the largest social housing projects our country has ever witnessed.

Photo: Pixabay

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