Economic factors underpinning the real estate market in Gozo

Abstract

The real estate market in Malta and Gozo attracts a lot of interest. This is to be expected given the contribution of this sector to the local economy in terms of value added and employment, the fact that the last few years have saw an intensification of activities, and also due to the externalities that construction generates. This paper seeks to explore the main supply and demand dynamics that have occurred in the real estate market in Gozo over the past decade. The main objective is that of presenting for discussion the question on whether the supply coming to the market can be understood by demand fundamentals, or whether the Island is collectively over-investing and over allocating resources to property development, thereby creating an excess supply situation.