Housing finance and its role in the development of the Maltese economy

Abstract

The aim of this study is to achieve a better understanding of housing finance and its roles in the development of an economy. The main method for financing housing in Malta is via home loans offered to the public by local commercial banks. In order to achieve this aim, semi-structured interviews with economists working in the Central Bank of Malta and local commercial banks were conducted. These candidates are experts of the field and were able to give us a better picture of the roles of home loans and the local housing market to recognise their implications in the country’s economy and their relationship. Home loans are related to the economy, according to the results obtained because their characteristics favour the country's financial system and capital market, resulting in long-term positive economic growth. In Malta, it was established that households can obtain housing thanks to convenient access to adequate and inexpensive credit through the country's financial system, which is made up of strong and secure banks. The benefits of home loans and housing are interrelated as housing is stimulated by home loans and is considered an important sector in the Maltese economy since it is linked with other sectors of the economy. Home loans play an important role in the development of the Maltese economy.