Young people are being excluded from the property market – Housing Authority document warns

Young people are being shut out of the housing market, an article published by the Housing Authority has warned, suggesting Gozo could offer a cheaper alternative.

The paper concludes that “housing, whether renting or buying, is unlikely to be a realistic prospect for young people in Malta without government intervention or family support, unless ‘they don’t marry, cohabit or move to Gozo’.

The paper, released earlier this week, was commissioned by the authority and written by economists Marie Briguglio and Glen Spiteri.

Young Maltese leave home very late

He argues that Maltese young people leave their homes much later than in other EU countries, mainly due to a lack of financial means.

The Maltese are among the oldest in the EU to leave the parental home and they do so until adulthood.

In 2020, the average Maltese flew the nest at 30, the third oldest among Member States and around four years above the EU average

While a young couple with an average income in Malta can afford a wide range of rental options, the same is not true for other young people.

An identical couple on minimum income or a young single person on average income has “much more limited” options.

Renting a room in shared accommodation is ‘the only affordable option’

Renting a room in shared housing is the only affordable option available to young people on minimum income. And, even if they opt for this option, they end up with little money left over.

Buying a house is also a difficult prospect for young people, although a hypothetical couple with average incomes can get a foot on the property ladder.

“Of course, this problem is not limited to Malta but concerns most cities in the world,” the newspaper read.

However, unlike larger neighboring states, Malta can be stuffy. This means the option of moving to cheaper property on the outskirts of cities and commuting is not on the table.

Malta can be suffocating

This, according to the authors, could be one of the reasons for the delay of young people leaving the parental home in Malta and resonates with the results of recent survey-based research.

The implications of this pose a series of questions highlighted in the paper: does it affect the marriage decisions of young people, pushing them to marry to afford joint property?

Does it discourage young people from staying in school, pushing them to settle earlier in stable jobs?

What is the impact on the lifestyle of their parents?

What is the risk of homelessness if the parents do not have family housing (or a legacy) to offer?

Could Gozo increasingly become an option for young people to set up their first home?

And what are the wider implications for young people’s mental well-being of staying at home?

On this last point, a recent study by the National Youth Council suggests negative implications.

The paper says much of its analysis is applicable to anyone in Malta on the minimum to average wage.

85,000 people in Malta earn less than €812 per month

Data released by the Office for National Statistics earlier this year indicates that more than 85,000 people in Malta earn less than €812 a month.

“These people cannot afford any rent or mortgage without state assistance,” the newspaper read.

“There is no doubt that an informed debate on incomes in Malta is crucial. One question for debate is whether minimum wages should approach living wages and how.

“After all, affordability (and lack thereof) is not an inherent characteristic of the housing or rental market, but rather one that speaks to the relationship between housing costs (rent or mortgage) and income. .”

The affordability paper is part of a new rental study released earlier this month.

It is the second of its kind since the government stepped in to regulate the rental sector in 2020.

Independent journalism costs money. Support Times of Malta for the price of a coffee.

Support us