How does the Canary Islands property market compare with that of the island of Malta?


How does the Canary Islands property market compare with that of the island of Malta?

The Mediterranean island of Malta and the Spanish Canary Islands are both popular destinations for holidaymakers and those looking to buy property overseas. Located off the coasts of Southern Europe and Northern Africa respectively, these archipelagos enjoy warm weather and beautiful beaches.

Their property markets have experienced significant growth in recent years, fuelled by tourism, foreign investment and appealing residency programmes.

This article compares the real estate markets in the Canary Islands versus Malta, examining property prices, types, buying processes and investment prospects. While they share similarities, notable differences emerge between the two island property markets.

THE CANARY ISLANDS PROPERTY MARKET

The Canary Islands, located off the northwest coast of Africa, have seen steady growth in their property market in recent years. According to statistics from the College of Registrars, property prices in the Canary Islands rose by 7.1% in 2024 compared to the previous year, with a 16.4% increase in Q3, raising the price per square metre to €2,719.

The Canary Islands are made up of 7 main islands - Tenerife, Gran Canaria, Lanzarote, Fuerteventura, La Palma, La Gomera and El Hierro. Tenerife and Gran Canaria are the most populated and touristy islands, while the others cater more to travellers looking for a quieter experience.

Some factors driving the Canary Islands' property market growth include:

  • Increasing tourism, especially from Northern European countries like the UK, Germany and Scandinavia. The warm climate and beautiful beaches attract both holidaymakers and those looking to retire there.
  • Investment in infrastructure, hotels and residential complexes, especially in the southern tourist zones.
  • Low cost of living compared to mainland Spain and most of Europe.
  • Special incentives for foreign property buyers, such as reduced purchase taxes.
  • Popular locations for buying property include the southern coastal towns like Playa de las Americas, Los Cristianos and Costa Adeje in Tenerife, and Maspalomas and Playa del Ingles in Gran Canaria. 

How does the Canary Islands property market compare with that of the island of Malta?

OVERVIEW OF THE MALTA PROPERTY MARKET

Malta has also seen significant growth in its real estate market over the past decade. Property prices have risen steadily at around 5-10% annually. The residential property index in Malta increased in 2024, with a 7% year-on-year rise in the second quarter of the year. Demand for apartments in Malta is especially strong, but the residential market overall has boomed in recent years.

Factors driving Malta's property boom include:

  • Malta's citizenship by investment programme, which grants citizenship to foreign buyers who invest in property in Malta.
  • Increased tourism and economic growth. Malta's GDP has expanded rapidly.
  • Malta's low taxes and stable political climate appeal to foreign buyers.
  • Limited land space on the small island is driving up prices.
  • Strong rental yields averaging 4-6% per year.

Popular areas for buying property in Malta include Sliema, St. Julians, Valletta, Mellieha, Marsascala and Gozo. The property market is dominated by apartments, though townhouses and villas are also available.

PROPERTY TYPES AND PRICES

Canary Islands

The average price per square metre for a property in the Canary Islands is €2,400, with prices on Gran Canaria slightly higher than on Tenerife.

Malta

The average cost of a property in Malta is €3,000 but there are big variations depending on the location, with property prices in Gozo cheaper than in Malta. Valletta is more expensive than, say, Zebbug or Fgura.

Residential properties in both markets can be found for similar prices, but properties on the higher end like villas are more expensive in Malta compared to the Canaries.

How does the Canary Islands property market compare with that of the island of Malta?

BUYING PROCESS

The process of buying property as a foreigner is currently relatively straightforward in both the Canary Islands and Malta.

In the Canaries, buyers need to get an NIE number, which serves as a foreigner ID number for tax purposes. A lawyer is typically hired to handle the conveyancing and paperwork.

In Malta, foreign buyers need to obtain an AIP permit before purchasing property. Hiring a real estate agent or lawyer is also essential.

Closing costs in both markets are around 10-15% of the purchase price. This includes taxes, legal fees and notary fees.

REAL ESTATE INVESTMENT PROSPECTS

Both the Canary Islands and Malta offer appealing prospects for property investors:

Canary Islands

  • A strong tourism market ensures good rental yields and capital growth potential, especially in the southern resort towns.
  • Permanent residency is available for buying property over €500,000, thanks to the Spanish Golden Visa programme, although this is supposed to be ending soon.

Malta

  • Rental yields averaging 3.5-6.5% make buy-to-let profitable.
  • Residency and citizenship are possible for investors under the investment visa programmes. The minimum investment for a property is €375,000, plus a contribution to the Maltese economy. 
  • Scarcity of land and housing on the small island keeps demand high.

The Canaries offer lower-priced properties in a tourist-driven market, but Malta's citizenship incentives and long-term fundamentals have spurred massive growth in the past decade. Both markets are appealing in their own right to investors.

The Canary Islands and Malta both have thriving property markets driven by their warm climates, tourism and investment migration programmes attracting foreigners. While apartments can be found at similar prices, Malta tends to have higher prices at the top end for premium villas and townhouses compared to the Canary Islands. Malta’s citizenship by investment scheme is a key driver not present in the Canaries. Both markets offer strong prospects for buyers, investors and renters.

How does the Canary Islands property market compare with that of the island of Malta?

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