Signs that rental property market is ‘overheating’

Though there does not seem to be any substantive evidence of a housing bubble, there are signs of overheating particularly in the rental market, a KPMG study has warned. Commissioned by the Malta Developers Association, the report focused on the construction industry, its economic contribution as well as major trends in the property market. Its findings were presented this morning during a national conference organised by the MDA at the Excelsior Hotel. It transpired that the total output of this industry on the economy is estimated to be in the level of €2.55 billion, while the total employment generated is that of 37,275 jobs. The report also concluded that this sector has the highest multiplier effect among all industrial sectors in Malta with a rate of 1.7. One of the core issues addressed by the study was the risk of a housing bubble – the term used in situations whereby house prices are inflated by an increase in demand coupled with speculative buying which further increases demand. According to the study from the available data, and qualitative input received from various MDA members following consultation meetings, there does not seem to be any substantive evidence of...