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Malta Sliema Rental MarketHave you ever thought about what’s truly going on in the rental market in Malta? If so, you are in the right place. Today, we’re delving into the details of
a comprehensive study on tenant and landlord experiences in Malta that has shed light on the dynamics and experiences of the renters and property owners in Malta.

This Housing Authority study was carried out by Marie Briguglio, Brian Micallef, and Tiziana M. Gauci provides us with an accurate depiction of the rental market three years later after the Residential Leases Act was put in place to regulate the market.

The Residential Leases Act was designed to clarify and protect all parties involved in rental agreements, addressing lease terms, rent increases, and maintenance requirements. By familiarizing yourself with the key provisions of this law, you can ensure a smoother and more transparent renting experience for everyone.

Whether you are a renter, property owner, or simply interested in the local real estate market, this post will provide you with some valuable insights.

Demographic Profiles

Landlords:

  • A small minority of foreign landlords make up the remaining 3% meaning 97% of the landlords are Maltese.
  • Only a small percentage of individuals from other EU countries (2%) and third-country nationals (1%) make up the total population.
  • The average age of landlords is 53.7 years, indicating an older demographic,
    quite a bit older than the general population.
  • Approximately one-third of landlords are retired and over half
    are over 51 years old.
  • Renting out properties is often seen as a part-time endeavour for many people, only a small percentage rely on the rents to make a living.
  • Landlords’ educational attainment is similar to the national average, and for many, renting out properties is more of a part-time job.

Tenants

  • Majority of tenants are foreigners, with only 10% being Maltese.
  • 74% of the individuals are third-country nationals, while 17% are from the EU.
  • The average age of tenants is around 37, with a majority being younger individuals. years.
  • Well-Educated: Almost half of the tenants hold a tertiary education degree, indicating a high level of education among residents significantly higher than the average population.
  • Most tenants are active in the labor market, with some receiving housing benefits.

Three years post implementation of the Residential Leasing Act 2020: An Overview of Malta’s Rental Market

It has been three years since the Residential Leasing Act Malta was enacted and in the year 2020 Malta has had a notable impact on the rental market. Introduced to regulate the rental market and offer increased protection for tenants.

Tenants benefit from increased transparency and fairness, which will also improve conditions for landlords.

The act included an important provision that introduced rent controls and imposed restrictions on the annual rent hikes landlords could implement. It has contributed to stabilizing rental prices and preventing abrupt increases in rental expenses offering tenants increased security and reliability in regards to their housing expenses.

The Residential Leasing Act 2020 also included a significant mandate to ensure compliance with local housing regulations, all landlords must register their rental properties with the authorities, adhere to specific guidelines to guarantee the safety and livability of the rental units and ensure any necessary upgrades, leading to an enhancement in the overall quality of rentals.

Furthermore, the act implemented fresh dispute-resolution mechanisms aimed at providing assistance, improving the efficiency and effectiveness of addressing disputes between landlords and tenants.  This has helped to minimize misunderstandings and enhance dialogue between the involved parties resulting in a rental market that is more peaceful and balanced.

To shape the future, it is crucial to consistently monitor the enforcement of the act. The market must be monitored and adjusted as needed to maintain its stability.

Rental Income and Property Management

The median gross rental income for landlords stands at €12,000 per annum. For most, renting is a secondary income source, with only a small fraction relying solely on rental income. A notable segment (13%) of landlords owns a substantial portion of rental properties (43%), indicating a concentration of property ownership among a few. These landlords typically manage multiple properties, making property management a significant part of their income strategy.

Satisfaction Levels:

Landlords Experience

Landlords express mixed satisfaction with their rental income and market conditions. While many are satisfied with the rental income relative to property quality, a significant number report dissatisfaction, particularly with market regulations and tenant-related issues. This dissatisfaction is more pronounced among landlords with multiple properties, suggesting that regulatory burdens and tenant management challenges increase with portfolio size.

The Tenant Experience

Mobility and Rental Preferences:

Tenants in Malta exhibit high mobility, with a significant portion having lived in multiple residences before their current one. This mobility is driven by various factors, including the search for better housing, relocation due to job changes, and dissatisfaction with previous accommodations. Most tenants prefer one-year leases, aligning with the transient nature of the expatriate workforce. However, there is a growing interest in longer-term leases, reflecting a desire for stability among those planning to stay and rent a property for a longer period in Malta.

Satisfaction and Financial Strain:

Tenants generally report higher satisfaction levels than landlords, particularly with services from the Housing Authority and real estate agents. However, financial strain is a notable issue, with about a third of tenants finding it difficult to make ends meet. Government housing benefits for locals play a crucial role in alleviating this strain for some tenants, underscoring the importance of social support mechanisms in the rental market.

Regulatory Awareness and Knowledge Gaps

Landlords’ Awareness:

Landlords show a higher awareness of the Residential Leases Act, particularly concerning the Adjudication Panel and minimum contract durations. Despite this, there are still notable knowledge gaps, especially regarding the legal nuances of shared space contracts and the correct procedures for rent increases. These gaps highlight the need for targeted educational campaigns to ensure landlords are fully informed about their legal obligations and rights.

Tenants’ Awareness:

Tenants exhibit lower awareness levels about rental regulations, with significant confusion about contract durations, rent increase rules, and termination procedures. This lack of knowledge can lead to disputes and misunderstandings, emphasizing the need for clearer communication and education. Direct communication, such as emails, is the preferred method for both tenants and landlords to receive information about regulations, suggesting a potential avenue for improving awareness.

Policy Recommendations for a Balanced Market

Improving Communication:

Enhancing communication about the Residential Leases Act through direct channels like email can significantly improve awareness and compliance. Regular updates and clear, concise information can help both landlords and tenants understand their rights and responsibilities, reducing disputes and fostering a more transparent rental market.

Encouraging Longer-Term Leases:

Promoting longer-term leases can provide greater stability for both landlords and tenants. Policies that incentivize longer contracts, such as tax benefits or streamlined renewal processes, can reduce turnover and create a more stable rental environment. This stability benefits landlords through reduced vacancy rates and benefits tenants through longer-term housing security.

Engaging with Landlords:

Regular consultation meetings with landlords can address their concerns and improve their satisfaction with the regulatory environment. These meetings can serve as a platform for landlords to voice their issues, provide feedback on regulatory impacts, and collaborate on solutions. Addressing landlords’ concerns proactively can enhance their compliance and cooperation with market regulations.

Conclusion

The Maltese residential rental market is evolving under the influence of the Residential Leases Act. This comprehensive study provides valuable insights into the experiences and satisfaction levels of both landlords and tenants. By addressing the identified gaps in awareness and satisfaction and implementing the suggested policy recommendations, policymakers can work towards creating a more balanced and stable rental market that benefits all stakeholders.

FAQ’S

What are the common reasons tenants in Malta move frequently?

Tenants often move due to a variety of reasons, including the search for better housing conditions, changes in job location, dissatisfaction with previous accommodations, and sometimes due to rent increases or personal preferences for different localities.

How do landlords and tenants differ in their awareness of the Residential Leases Act?

Landlords generally have a higher awareness of the Residential Leases Act, particularly regarding key aspects like the Adjudication Panel and minimum contract duration. Tenants, on the other hand, show lower awareness levels and often have confusion about contract durations, rent increase rules, and termination procedures.

What steps can be taken to improve tenant and landlord satisfaction in the Maltese rental market?

Improving communication through direct channels like emails, promoting longer-term leases, and engaging in regular consultation meetings with landlords can significantly enhance satisfaction. These steps can help ensure both parties are well-informed, reduce disputes, and create a more stable and transparent rental market.

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