Mum and Dad to the rescue: One in 10 properties acquired in Malta between 2010 and 2020 gifted by parents

Maltese home-buyers are increasingly benefitting from the outright gifting of property from their parents, with no fewer than one in every 10 properties acquired between 2010 and 2020 arriving as a present from Mum and Dad.

This marks a stark difference to the situation in previous decades, where the gifting of property stood somewhere between the two and three per cent mark.

However, this does not mean that family connections were unimportant. Rather, it reflects the changing strategies of family support in view of market realities.

For example, before 1990, 32 per cent of all property was self-built – typically with extensive parental support in an inter-generational transfer of skills and value.

With most housing now made up of apartments in multi-unit blocks, building your own house has become less feasible. On the other hand, changes to planning laws have resulted in a few pathway to parental support, as single-family houses could be turned into blocks of apartments that could be apportioned between one’s children.

The study, conducted by economist Dylan Cassar for the Foundation for Affordable Housing, suggests that this phenomenon is the cause for the bulk of the increase in gifting of property.

This is further supported by the finding that around 10 per cent of all homeowners between 16 and 34 received their property as a gift.

“The property as gift as an emerging family strategy in Malta suggests that, in the face of market pressures on younger individuals who find the challenge of becoming a homeowners becoming tougher, the family is strategising – defensively, one should add - in order to meet the housing needs of the younger generation,” writes Dr Cassar.

Commenting further on the phenomenon, he notes that parents are increasingly “seeking to release their wealth tied up in their property that had historically remained largely ‘unrealised’.”

One main reason, he suggests, is the strong feeling of attachment one would have with their own home: “The ‘destruction’ of one’s home is, no doubt, an emotional matter in the way it entails the destruction of a highly-charged, personal, intimate and familial space. It seems, however, that for some the desire to see their children off has overcome the – possibly temporary – loss of one’s home.”

Dr Cassar points out that the process could unfold in a domino-like effect once neighbours, friends and family realise that they are sitting atop a potential gold mine that could relieve their children of significant pressure and stress.