While the rental market may be booming, you might be surprised to hear that home ownership in Malta is actually very high. So high, in fact, that over 80% of people own their own home in Malta. That makes the home ownership rate in Malta one of the highest in Europe. A bigger percentage of people own a home here than they do in Germany, the UK or France.
Less than 20% of the population rents an apartment in Malta. Renting, as opposed to owning your own home, does bring a lot of benefits. For instance, renters aren’t liable for maintenance costs. Renters also have more flexibility and can choose to move easily, if they don’t like the area or their neighbours. However, becoming a homeowner is also a very positive thing. There are many benefits associated with becoming a homeowner. Read on to find out why more than 80% of people choose to buy, instead of rent, their own home in Malta.
Appreciation of assets
An asset is anything that you own which is regarded as being valuable. Property, as opposed to a car for example, is generally an appreciating asset. When you buy a car, or a TV or a computer, it tends to decrease in value the more you use it and the older it gets. Assets which decrease in value are known as depreciating assets. Land and property, however, on the whole, are appreciating assets. Their value usually increases over time. Property prices in Malta have been increasing year on year. And, over the last few years, home prices have spiked. While property prices may not increase steadily, or even at all some years, property is often seen as a safe investment. Over the long term, you can safely expect to see a rise in the value of your home. So, if you’re planning to keep your home for a good number of years, you will most likely see some (if not a lot of) appreciation.
Owning your own home can give you financial stability as well as stability in your life. Rental prices in Malta have shot up in the last few years. They will probably continue to rise every year, albeit perhaps not as dramatically. However, that does mean, as a renter, you won’t necessarily have financial stability year upon year. You won’t be able to predict how much rental prices will go up every year. If you rent, your cost of living will continue to increase. On the other hand, when you own your own property, you will most likely have a fixed mortgage payment. This gives you more stability than renting. What’s more, you won’t have to up and move every 12 months. Of course, some rentals in Malta will allow you to renew your contract but that’s not always a guarantee. When you own your own home, there’s no expiration date!
Becoming a homeowner will increase your net worth. Your personal net worth is worked out by subtracting your liabilities from your assets. Your liabilities are what you owe, and your assets are what you own. Liabilities cover things such as personal loans, mortgages, overdrafts and credit cards. Your assets include your home, your car and your cash (current accounts, savings accounts, retirement funds etc.). Owning your own home will increase your net worth a lot. Over time, as you pay off more of your mortgage and your house value increases, your net worth will only go up.
Your home equity will go up as your property increases in value and your mortgage goes down. Home equity is the value of your home minus how much you owe. When you first take out your mortgage, you will have little equity. However, with every mortgage payment, you will be reducing the amount you owe. At the same time, your property will likely increase in value. So, over time, you will own more and owe less, and your home equity will go up. You can ‘release’ this equity to invest in other things, such as a buy-to-let property, children’s school fees or a business.
Authority over your own living space
Another great perk of owning your own home is that you will have authority over your own living space. This might not be a financial benefit, but it’s a benefit all the same. When you buy your own house in Malta, you will be able to lay it out and decorate it exactly as you want. When you rent an apartment in Malta, you probably won’t be allowed to make any changes to the interior or exterior. Perhaps an owner might let you paint a wall or two, but they certainly won’t let you rearrange the layout or redo the flooring. As a homeowner, you’ll be able to have your home just how you like it. Depending on your budget, you’ll be able to do up your home to your own tastes. You can put in your dream kitchen and bathroom, handpick all of your furniture and choose the colour scheme. Every time you walk in through your front door, you’ll feel proud to be home.
Community and social perks
Again, this is a non-financial benefit of owning your own home in Malta. When you buy a property and move in, you can put down roots. This is especially positive if you have children. As a renter, there’s no guarantee that you will be able to renew your contract when your lease ends. If you do have to move, there’s also no guarantee that you’ll be able to find another similar rental property in the same area. When you own your own apartment in Malta (or your own house!), you will have more stability. Knowing that you’ve settled in a particular area is a good feeling. If you have children, you can enrol them in a local playgroup or school. They will make local friends and so will you. You can also get involved with the community, if you like. It feels good to put down roots like this, especially in Malta where community is important, and everyone is friendly!