No flat? Blame foreign workers

Controversies divide the Malta property industry as foreign workers are needlessly blamed for rent hikes.

Daiva Repeckaite
Daiva Repeckaite NewsMavens, Malta
No flat? Blame foreign workers - NewsMavens
Apartment block in Valletta, Malta, Wikimedia Commons

Why this story matters:

At a recent conference on tourism and its impact, Simon Debono, spokesperson of the Federation of Real Estate Agents, fanned controversy as he claimed that the Maltese will be "displaced" by soaring rents, attributing it not only to the conversion of long-term rental property to short-term tourist lets, but also to increasing numbers of foreign workers.

New forms of tourism, such as popular urban escapes, are gnawing at the already limited accommodation on the rental market, and some residential buildings in popular areas are becoming boutique hotels.

People who depend on the rental market for a place to live are predictably anxious about the future, as rents are skyrocketing, and value for money is ever lower.

"Foreigners are outbidding the Maltese every time,” the association claimed,  ignoring the news about African asylum seekers living in crammed garages.

Foreigners who can actually afford comfortable and expensive accommodation are typically employees of online gambling companies, which generate 11% of Malta's GDP. It's all too easy to blame foreigners for many things that residents don't like about the path their country is taking.

The surging rental prices most severely affect those who are blamed in speeches like this -- foreign workers. Even an association that represents the real estate market came out to criticise the statement that native Maltese will be displaced by foreign workers -- although their consolation that the rental market is "plateauing" is of little comfort to most.

Details from the story:

  • The Federation of Real Estate Agents claims that 28% of the population lives in rental accommodation, versus the Eurostat figure of 19%, with most of them renting at a reduced rate.
  • According to Eurostat, three in five residents in Malta owned their accommodation without a mortgage, one in five owned some with a mortgage, one in six rented at a reduced rate (e.g. social housing), and only 3% rented at a market rate.
  • Many tenants can barely keep up with the price spikes. Lovin Malta has collected numerous stories on the rent craze: a single mother at risk of losing accommodation, landlords cheating tax authorities by double accounting, and tenants ending up with mould-infested overpriced housing.
  • Although Malta has been declared one of the cheapest destinations for all-inclusive holidays, increasing numbers of tourists are looking for something else. An experience that feels local, as pointed out by Leslie Vella of Malta Tourism Authority at the conference. This often includes staying at an AirBnB. 
  • The Maltese government is currently preparing a White Paper on the housing market.  Prime Minister Joseph Muscat has anounced, however, that while rent stabilization is a goal, state intervention will not take place.
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