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Inside Malta’s Construction Boom

The influx of foreign capital has given rise to ambitious large scale construction projects that are reshaping the bustling Mediterranean island

Published: 20/08/2018

Country: Malta

In recent years,  Malta has seen a meteoric growth of its small island economy. The influx of foreign capital has given rise to ambitious large scale construction projects that are reshaping the bustling Mediterranean island. We are looking into the background of the economic boom and how it will affect Malta in years to come.


Ever since its independence from Britain in 1964, Malta shyly began its economic growth through tourism and industrial development. The real change began in the 1990’s when the state introduced a number of measures to boost the residential market, and reached its current levels once Malta joined the EU (2004) and the Eurozone (2008). Through tax benefits, investment citizenship programs and other measures, the Maltese government was able to draw a large volume of foreign capital that has become the primary wind in the sails of the construction and real estate market booms.

Weathering the storm

The global economic crisis of the early 21st century have sent shockwaves across the globe, and the construction and real estate sectors were among those most heavily hit. Malta wasn’t exactly able to escape this trend, but did come out of it relatively unscathed. Even during the height of the crisis property prices have remained fairly stable, allowing the sector’s growth to continue as soon as the overall economy has recovered. Furthermore, Malta continued to attract foreign capital and became a popular destination for business immigration, giving further incentive to the continued development of construction, property purchases and the rental market.

Expat haven

Malta has been one of the greatest success stories in finding creative ways to attract foreign investments. A small country with limited means and economic potential, Malta was forced to look outside of its borders for a spark to ignite its economy. Among the main draws for foreign investors were Malta’s investment citizenship and investment residency programs. In exchange for a Malta golden residency or passport, the investors are required to meet several financial demands, including buying property of certain value or renting a property to the period of five years minimum, or for the duration of your residency status. This represents not only a popular way to get a foothold on Malta’s ever-growing real estate market, but provides the investor with additional benefits such as free travel, a favorable tax environment and a direct collaboration with relevant government agencies.


Where are we now

You don’t need to look hard to notice the indicators of the construction boom in Malta. Just a cursory glance at the skyline of Malta’s capital Valletta, shaped by a mass of construction cranes, will reveal the full extent of the construction wave. This wave is primarily driven by the demand for luxury developments, including high class residential projects, commercial real estate and a variety of leisure facilities. This is also accompanied by large-scale infrastructure projects, such as major improvements of the road network and the transformation of Valletta’s historic entrance gate, with many more planned for the near future - a clear show of local government’s intent to support the growth of construction projects by providing a solid and stable infrastructure.

What lies ahead

With the persistent and growing demand for residential and commercial real estate in a country with limited space, government agencies are pushing for a shift to high-rise development. This is accompanied by attempts to formulate a nation-wide strategy that would regulate what can be built where. Of course, these steps were followed with a lively public debate on how such an increased scope of development would affect Malta’s nature, culture and heritage. This debate, however, will do little to slow down the construction wave, but hopefully it will result in sustainable long-term development.

In the eyes of its government, the Malta of the future is a cosmopolitan society with a healthy economic environment. The construction and real estate sector has been one of the pillars of the country’s recent economic growth, and they are bound to lead Malta towards its desired future.

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