Malta property becomes less costly, as pound nears 16-month high

09.05.2014

One more great reason to buy a property in Malta! Malta property has fallen in price lately, as the pound has reached 1.2247 versus the euro, just shy of its highest in 16 months, or since January 10th 2013.

To put this into context, sterling was at just 1.1371 last March, meaning it’s since bounced back by almost 9 cents. Were you to transfer £125,000 to Malta to buy a property, you’d hence get an impressive +€10,688 more today than March 2013. Clearly, this puts your dream Malta property closer within reach!

Why has the pound jumped against the euro?

Sterling has neared this 16-month high versus the euro, chiefly because the UK economy is growing like there’s no tomorrow. For instance, just this week the OECD upgraded its 2014 growth forecast for the UK +0.8%, to a jaw-dropping 3.2%. This will make the UK the world’s fastest-growing major economy, hence boosting the pound.

At the same time, the euro has weakened of late, because the Eurozone faces the threat of Japanese-style deflation. This is where prices continually fall, which sounds nice, but leads to economic stagnation, as people keep putting off their shopping to see if things get cheaper. So that’s brought the euro low too!

Will the pound continue to climb?

Moreover, the pound looks set to exceed its 16-month high in the near future. This is because, with the UK economy fit and frisky, the Bank of England may soon become the first major central bank since the financial crisis to hike interest rates. This will send the pound yet higher, further cutting the cost of Malta property in 2014!

Luzzu

About the writer

Peter Lavelle is an economist at foreign exchange broker Pure FX. To get free expert currency advice about the best time to transfer money to Malta, call him on +44 (0) 1494 671800 or email peter.lavelle@purefx.co.uk.