A change in the property market

The Maltese property market is at present, and indeed has always been, very good and stable, and the new properties that come on the market have been sufficient to satisfy the local demand with some left over for investments and foreign purchase.

This situation could soon change for the following reasons.

Before I give these reasons, it is important to mention that the construction industry, and the property market, have been, and still are, two of the main pillars of our economy. It is vital that they stay healthy, until someone comes up with another way of creating similar employment and generating similar income in our economy.

Why could the present situation change?

Well, it doesn't take an Einstein to realise that many Maltese have already purchased their homes, and that many Maltese have already purchased property investments. The number of foreign purchasers buying property in Malta number about 600 a year while the number of foreigners selling is slightly lower. This means that the current property market will carry on being healthy as long as the number of new developments do not greatly outnumber the number of existing potential purchasers.

This is the situation in most countries, and if we look at one of our closest competitors, Spain, we see that when the Spanish developers started undertaking big properties, they had to aggressively market these developments abroad in order to find new purchasers.

This meant developers spending large amounts of money advertising in overseas newspapers and magazines and participating in many overseas property exhibitions. In other words, their development costs had to incorporate a very large marketing budget.

Before Portomaso was developed, Malta did not have any large developments. Our small developments catered for our requirements.

Portomaso didn't need large marketing budgets because the development was beautiful and practically sold itself and also it was the first of its kind in our islands. However, being the first of its kind, some local agencies still devoted a large proportion of their marketing budget on promoting this development abroad.

Tignè Point has not needed a large marketing budget so far, because it was fortunate to commence its marketing and sales when there was a huge amount of spare cash on the market, and return on other investments was very low.

If, however, in the future, Malta has more and more large developments, then these will certainly have to market themselves very aggressively if they are to get extra purchasers to come over to Malta and buy them. These developers will have to do exactly the same as their counterparts in Spain and elsewhere and put their hands in their pockets and market professionally.

And we are going to have many more large developments appearing on our local market. Whether you like them or loath them, they will all have to be very well designed, well built, well marketed and aggressively sold if they are to be successful.

Many large new developments have already been given the green light by Mepa, and there are many, many more in the pipeline. Most of them are not using new land but utilising the area vacated by other structures. But, nevertheless, they are still going to be built. And if they are built, then they have to be sold. If they are sold, then they are going to bring a lot of benefits to our economy. If not...

So when I say that there will be a change in our property market, you can see exactly what I mean. The change will mean becoming more professional and finding new buyers as well as keeping the buyers we already have. We must design and build more attractive properties. Properties that can compete with the very best elsewhere. Spend more of our investment capital on aggressive and successful marketing outside of Malta.

The bye-product of all this will be a continuing healthy and prosperous property market and plenty of overseas publicity for our islands, with the resulting visits to our country of many tourists spending long or short periods of time here.

The government can also help enormously in this new scenario, by not creating property tax policies that could discourage potential overseas purchasers and also help promote Malta along with developers as a very acceptable place to come and visit or to permanently reside.

I can hear some readers saying that all this will be a nightmare, and we do not need more property or more people coming to Malta.

Fine. If that is the case, then stop all new development permits. Let our construction industry stagnate with the resulting loss in jobs.

Find alternative employment and income into our country. But if that cannot be done, then at least let us do what we have to do, and do it well, so that the product and money we leave behind will be for the future good of our country.

Mr Salt is a real estate agent.