Property investors have done well on the Mediterranean island in recent years, with good annual increases in prices over the last ten years.

But with EU membership now two years old, and questions last year about Malta staying as a mainstream holiday destination, future potential became questionable.

Estate agents on the island though seem fairly confident that the rises will continue for a while yet. At the beginning of the year two leading international estate agents predicted ten per cent inflation for 2007.

One factor that investors could be taking into account when looking at the possibility of buying a property in Malta is that Malta is joining the Euro at the end of the year - something that has caused other countries real estate market to gather pace in the past.

Malta's low taxes are also inceasingly attracting new residents this year. With tax at less than half of many other EU countries, buying real estate in Malta often makes economic sense, as well as being a home in the Mediterranean for many.

Buyers from the UK in particular often cite Malta's low tax regime as one of their primary motives for moving to the island.

Visitor numbers for Malta have been encouraging for 2007, with rises on 2006 for each of the first three months of the year. March showed a ten per cent increase. An increased pool of visitors will almost certainly translate into more sales from overseas, with a knock on effect on housing prices.

UK Buyers

Ryanair's new routes from London and Dublin to Malta have proved a success both for the airline and for the island since the launch in November of their Luton flights. Initial estimates of an extra 80,000 tourists due to Ryanair might be much lower than the true figure when results are published. Reports suggest that Ryanair might be considering further flights to Malta from different destinations. Whether this will be from the UK or elsewhere isn't clear yet.

But hopes that popular low cost airline easyJet would provide further impetus for the Malta holiday trade seems to have been dashed with reports in the island's press that talks have stalled, and a proposed London Gatwick route has been shelved.

A new low cost London Gatwick route would have provided competition for the island's national airline, Air Malta, and possibly have reduced the cost of flying to Malta further.

Air Malta, the island's national airline, has run a successful campaign to sell seats, and has opened up a new route from the North-West of England, flying from Liverpool's John Lennon Airport.

The advantage Malta has for UK and Irish visitors is that they drive on the same side of the road and English is spoken, and for non British Isles visitors Malta has well known language schools where they can learn English.

A 2 bedroom apartment in the popular Malta holiday resort of Qawra is currently on the market for LM 72,000, and a three bedroom two bathroom apartment in equally popular Mellieha for LM 138,000 negotiable.

'With lower fares, Malta becomes a destination viable for 3 and 4 days trips a few times a year from the UK, and that will attract buyers to look at Malta in the same way they do France and Spain when considering where to buy a holiday home abroad. The weather in Malta and low fares could be a magnet for buyers', commented one local travel guide recently,

There is a warning however from some that property prices on the island might not necessarily escalate in the same way that regions of France have seen when low cost airlines have started flying to their region.