South Africa’s GDP forecast for this year predicts a gloomy picture indeed. For 2021, the World Bank projects a gross domestic product (GDP) growth of 4%, followed by 2.1% in 2022 and 1.5% in 2023. This prediction was before the recent looting and violence witnessed in KwaZulu-Natal and Gauteng. The government’s increasing debt levels are also not helped by bailing out state enterprises repeatedly such as Eskom, Telkom and the now defunct national carrier, South African Airways (SAA) and  have placed pressure on the country’s credit rating signalling additional risks. On May the 21st S&P affirmed South Africa’s long-term foreign-currency rating of BB-, or three notches below the investment grade

Figures like this are unheard of in Malta, the latter whose economy has seen unprecedented growth the last few years, especially in the property sector.

Being a high-income country and having an innovation-driven economy, Malta has a very stable financial base with many large infrastructure projects. Malta has an insatiable and resilient domestic demand and emerged from the Euro-Zone crisis far better off than most of its counterparts. Another achievement is that over the past few years public finances have been considerably consolidated: Malta’s debt-to-GDP’s ratio fell from above 70% to around 53.7% in Q3 of 2020. The IMF’s forecast is that this will further reduce to just 35.7% in 2021 (nordeatrade.com). Compared to South Africa, Malta has a very high employment rate with unemployment standing at only 4.7%.

When it comes to the cost of living, Malta offers value for money. For example, when compared to South Africa, the cost of public transport and having a home Wi-Fi connection (even after unfairly converting euros to rands) is cheaper in Malta!You don’t pay rates and taxes, you pay what you use, medical cover costs a tenth of that in South Africa, there is no need to pay a security company and as crime rates are so low, your household and car insurance is very cheap.

When it comes to real estate, the Maltese islands offer a good choice of property types: from seaside apartments in cosmopolitan towns to historic farmhouses and rural retreats. On the property-as-investment front, Malta’s property market is very stable and still on the increase, offering steady but excellent capital growth in Euros and for the first quarter of 2019 it saw an incredible growth of just under 11%, outperforming many other traditional investment sectors.

This boost was due to low interest rates, more disposable income, and a rise in qualified, well-paid foreign workers. For 2020,  Malta has an expected growth of 5%. the house price index for several EU countries, compared to the same time last year in the first quarter, growth was as follows: France 4.9%, Spain 3.3%, Cyprus 1.1%, Italy 1.7% (ec.europa.eu). South African house prices fell by 1.22% adjusted for inflation during the same period (globalpropertyguide.com).

For South Africans investing in property, Malta is thus one of the best markets to see considerable growth on investment but when it comes to size and value for money, South Africans may find that they will have to scale down on their hopes of having the same large gardens, swimming pools and acres of land they are used to. Malta has one of the highest population densities in the EU, so space is an absolute luxury. If you want space, it comes at a price.