Malta can afford growth – now it must learn to deliver it

Public debate in Malta has settled comfortably on one phrase: the affordability crisis. Rents are rising faster than wages, younger households are squeezed, and insecurity in the private rental market is becoming structural rather than cyclical.

Recent studies cited by the union Solidarjetà confirm what many tenants already know: for a growing share of households, housing costs are no longer keeping pace with income.

That diagnosis is valid – but it is incomplete.

An article recently published by The Economist makes a useful distinction that Malta would do well to reflect on. Across Europe, the deeper issue is no longer simply whether people can afford things, but whether economies can supply enough of what people need – homes, services, skills, and time – in systems constrained by regulation, capacity, and demographics.

Malta sits precisely at this intersection.

Yes, affordability is deteriorating – especially for renters

Let’s be clear: Malta’s private rental market is under severe strain. Evidence shows rents have increased faster than wages, pushing low- and middle-income households into vulnerability. Overcrowding, shorter leases, and insecurity are becoming normalised. For many tenants, affordability is not an abstract concept – it is a monthly stress test.

But focusing exclusively on prices risks missing why the problem keeps worsening.

Rents are rising not only because landlords are charging more, but because demand is persistently outrunning supply in a small economy with limited land, delayed delivery, and competing uses for property – residential, tourism, and investment.

This is not a temporary mismatch. It is a capacity problem.

Malta is a full-throttle economy with hard limits

Malta operates close to full employment. Labour shortages are widespread. Population growth has been rapid. Infrastructure, housing stock, transport systems, and public services are under constant pressure.

In such an environment, stress shows up everywhere:

• Finding a suitable rental becomes harder, not just more expensive
• Services slow down because workers are scarce
• Waiting times lengthen even when people are willing to pay

People feel worse off not only because prices are higher, but because access is tighter. This helps explain the disconnect between strong macroeconomic indicators and widespread frustration. Income alone no longer guarantees quality, choice, or stability.

Why this distinction matters for policy

If Malta’s challenge is framed only as affordability, policy responses gravitate toward subsidies, controls, and compensation. These may ease symptoms, but they do not expand supply. In some cases, they can even discourage it.

If the challenge is recognised as a structural supply squeeze, the policy conversation changes:

• Housing delivery, not just rent support, moves centre stage
• Planning, infrastructure, and productivity become economic priorities
• Migration, skills, and service capacity must be aligned, not improvised

Affordability problems are real – particularly in the rental market. But they are being fuelled by something deeper: an economy pushing against its physical, labour, and institutional limits.

The risk ahead

Malta’s growth story has been impressive. Jobs are plentiful and economic momentum remains strong. But when access to housing, services, and stability keeps deteriorating, public confidence erodes – even in good times.

As The Economist rightly argues in a European context, dissatisfaction grows not when people are poor, but when systems cannot deliver.

Malta’s challenge now is to move beyond treating the symptoms – and start confronting the pressure building underneath.