It’s a buyer’s market, and if you’re tempted to pack your bags, lured by the sparkling crystal clear seas and low tax rates in this expat haven, you wouldn’t be alone, says Amy Grace

Not only were residents in Malta enjoying temperatures of nearly 20 degrees when the UK was snowed in last month, they were revelling in the knowledge that their tiny island, slightly smaller than the Isle of Wight and an hour ahead of GMT, has a superb quality of life, low crime rates, and a property market that has not experienced any drastic dips – most likely due to the fact that not too many Brits had joined the party during the last property boom in 2003 to 2004 and, consequently, there was no sudden mass exodus.

Close to southern Italy and North Africa, yet boasting a sophisticated European property scene that is a magnet for top designers and architects, Malta scored highly in the recent International Living Quality of Life Index, with freedom and security, climate and the environment all being awarded between 85 and 100 per cent. Though restrictions are placed on how many properties foreigners can buy on Malta, there are opportunities to buy, and rent out, multiple properties in special investment areas – Specially Designated Areas (SDAs). Tight regulations govern the conditions of purchase and rentals in residential areas outside the SDAs.

Mark Bodega, Director at HiFX.com, the UK’s leading independent online foreign currency exchange brokers, explains why he thinks there is still reason to exercise caution. He said: “It was apartments that led the house price crash. Malta’s EU explosive housing boom in 2003 to 2004 saw tremendous house price increases and sharp rises in construction activity, but with waning demand and oversupply, the housing boom is now officially over.”

However, with such a small landmass, the future for house prices looks promising. Even if the pace of capital appreciation has slowed, developers cannot simply keep retreating further inland as they have done in Spain.

Jeffrey Buttigieg, Regional Director for Re/MAX Malta, comments that: “Developers of high-end projects such as Portomaso and Tigne Point have had encouraging results throughout 2009, and are looking forward to a prosperous 2010. Those doing less well are the developers of smaller, low-budget properties, though first-time buyers who were struggling to purchase a property previously are benefitting from the lower property prices and low interest rates.”

Read more in the March issue of Living Abroad magazine