The recent boom in the Maltese rental market : an analysis of the cause and effect

Abstract

This local study aimed to explore the recent boom in the Maltese Rental Market. It further aimed to analyse what has caused this boom and how it has affected the market. The objectives of the study are to explore the recent boom, to understand the investor's perception of property and revenues obtained. It further focused on what entices a person to invest on the property market as opposed to other investments, and to gain a broad understanding of why the demand for rental property has drastically increased. Through the use of a self-designed interview schedule, data was collected from six individuals who are active on the rental property market. With the use of this qualitative analysis, in depth information was gathered from the six participants. Ethical considerations were strictly adhered to and prioritised. The six participants who met the inclusion criteria were recruited through snowball, a non-probability purposive sampling. Each participant part took in the study voluntarily. The conducted interviews were audiotaped and transcribed verbatim using thematic analysis as explained by Braun and Clarke (2006). Findings demonstrated that the causes towards the boom were the influx of foreigners immigrating to the island for work, the relocation of Gaming Companies towards the island, and the sudden surge of demand for rental properties. As a result of this, individuals started inflating their prices, new localities experienced the rental market for the first time and a large number of individuals were interested in becoming rental investors. This may be due to the fact that the rental industry is currently providing an average of 5-7% return on investment. In view of this, stakeholders are enticed to invest on this market as opposed to other types of investment. Findings also indicate that an investor looks for specific localities, particular facilities and amenities when seeking to invest in a property for buy-to-let purposes. The investor conducts feasibility studies and analyses the possible uses of the property to maximize profits. Despite the study not indicating whether the boom is in fact a bubble, over-supply of property and the departure of foreign companies can negatively impact the property market. The study recognises the need for it to be replicated using mixed methodology, thereby allowing the findings to be generalised. Furthermore, the study could be replicated with the aim of achieving the tenant's experiences. It is also recommended for government bodies to forecast the demand and supply of property on the market.