Imagine you’re a first-time buyer in Malta, dreaming of owning a piece of our beautiful islands. Now, picture the Nationalist Party (PN) promising to help you achieve that dream. But how much would that really cost? The PN claims €2.8 million. But we’ve crunched the numbers, and the reality is quite different.

The PN’s proposal promises a €20,000 grant for first-time buyers. With around 1,800 first-time buyers annually, the PN estimates the scheme would cost €3.6 million. However, they’ve overlooked a crucial detail – the scheme’s lifetime cost.

First-time buyers often stay in their homes for decades. So, we’ve calculated the scheme’s cost over 30 years. At a 3% discount rate, the present value of the scheme is a staggering €37 million, not €2.8 million. That’s a difference of €34.2 million – enough to buy over 1,700 apartments at today’s prices.

To understand how we arrived at €37 million, let’s break down the calculation:

• Annual cost: €20,000 x 1,800 buyers = €36,000,000
• Present value (PV) calculation: PV = Annual cost / (1 + i)^n, where i is the discount rate (3%) and n is the number of years (30)
• Result: PV = €36,000,000 / (1 + 0.03)^30 ≈ €37,000,000

If implemented, the PN’s scheme could significantly boost demand for affordable housing. But with a €37 million price tag, it’s a substantial commitment. It’s crucial that policymakers consider the full cost and potential impact on the market.

with housing prices soaring in Malta, particularly in areas like Sliema and St. Julian’s, the scheme could drive prices even higher in popular areas. First-time buyers might find themselves priced out of the market they’re trying to enter.

On the other hand, a well-designed scheme could help first-time buyers in less expensive areas, like Żabbar or Żurrieq, where prices are more affordable. It could also encourage developers to build more affordable housing, helping to ease the pressure on the market.