Property market experiences 'very healthy' year
As the property sector sealed a "very healthy" year, the Association of Estate Agents yesterday insisted that European Union membership would not hike up property prices.
"Normally there's always a slowdown and uncertainty in this sector before the elections - this time, for some reason, it hasn't happened," association president Michael De Maria said.
Though no official statistics of property sales exist, Mr De Maria and association members Mark Grech and Michael Mifsud, who also operate three of the main estate agents, agreed there was a general positive feeling in the property sector at present.
"I believe the property sector reflects the pulse of the economy," Mr Grech said, who added that EU membership would give the economy the necessary impetus.
The association said that contrary to the claims made by some, EU membership would not send property prices rocketing.
Only "exclusive properties in exclusive areas" might experience an increase in prices but the common, run-of-the-mill properties were "very likely" to remain constant.
Mr De Maria said the public should keep in mind the permanent derogation obtained by the government in its negotiations with the EU which restricted the right of EU citizens to buy property in Malta.
As a result of this arrangement, the concern that foreigners will be able to freely buy as much property as they like in Malta upon membership was removed.
Today, foreigners can already buy property in Malta. However, they are limited to just one property at a cost of not less than Lm30,000 for flats and Lm50,000 for houses.
In all other cases, current restrictions will continue to apply. This means that EU citizens who want to buy a secondary house in Malta to use as a holiday residence will still require to apply for an authorisation and will still need to satisfy conditions as is the case now. And they will not be entitled to buy more than one property.
Mr De Maria said the overwhelming demand for MIDI Consortium's apartments in Tignè was a reflection of the robust market.
A total of 140 Tignè apartments, with price tags ranging from Lm89,000 to Lm250,000 for a luxury penthouse, were snapped up in two weeks.
Mr Mifsud said property was being turned over at an encouraging rate as a lot of people were buying properties as a second investment.
He said he believed the main reason behind the upsurge in property buying was the rather dismal state of the stock market. "We know that many have pulled their money from investments and putting them into property," he said.
Mr Grech said the relatively high capital gains tax made it increasingly difficult and risky to speculate in property.
"Just because people buy property from MIDI for investment purposes doesn't automatically make them speculators. And this sudden buying has nothing to do with the EU."
So which areas are in demand?
Despite the rather high prices, the Sliema/St Julian's area remains one of the most popular areas while demand was also increasing in the Valletta/Cottonera areas.
Mr De Maria said it was the cost of land that had increased substantially in the past 10 years.
He said some development sites had seen prices pushed up by some 350 per cent. Properties with gardens and seaviews had also experienced a relative increase in prices.
The general positive tendency of the Maltese population towards home ownership, property investment and long-term retention of assets for future generations is also worth noting.
Official statistics show that 67 per cent of the population are property owners.
Mr De Maria said the increased competition between the commercial banks had also helped tremendously to give property-buying the necessary impetus.
"Nowadays bank officials come up to us to encourage more lending," Mr Mifsud added.
A bank manager said, when contacted, that the demand for home loans in the past couple of years had been overwhelming as banks demanded lower down payments and offered attractive rates and conditions.