There is plenty of discussion about the human and social aspect of the ongoing housing crisis in Malta. The young generations are facing extreme challenges to obtain housing and start families and this is also negatively impacting the birth-rate. However there is also another cold and calculating aspect of this crisis which is currently being ignored, and this is the economic cost of the crisis.
The housing crisis is not just preventing the young generations from starting families, it is also causing extreme damage to the economy, research, culture, science and innovation. The housing crisis is basically gutting the whole country and preventing significant progress in all fields and endeavors.
I don’t have a detailed study to prove this, so instead I will describe my situation as an example to prove my point. I run a micro business with three employees, and this is something I am able to do because I am not afflicted by the housing crisis. I bought my first property in 2012 before the L-Aqwa ลปmien property boom and this enabled me to take significant risks later on in life and start a business.
In order to understand this point, one also has to understand that spending money in the economy as opposed to spending money on a mortgage or rent, creates more economic and multiplier activity.
Those who are stuck in the poverty-rent-spiral are not going to make significant contributions to our economy. The housing crisis is preventing many young people from fulfilling their potential as it ties them down to their rents or their mortgages with little optionality to find time and money for any endeavors. This means that many young people are forfeiting their dreams on the altar of Malta’s housing crisis. In exchange for a hot real-estate market, Malta is giving up Phds, scientific projects, art, small businesses, and many potential families.
It’s remarkable how no one is working on such a study.
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Historian and Publisher
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