Prospects of glut of unsold apartments

Malta could end up with a glut of unsold apartments by the end of the year as the property market reaches saturation point and turns the island into a concrete jungle.

One prominent estate agent told The Times his agency sold a record number of houses and sites last year, practically all of which have been earmarked for new apartments. It is difficult to estimate the exact number of new apartments being built but estate agents reckon there are thousands lined up for development.

Suffice to say that over 3,300 new apartments will be built alone in just six sites formerly occupied by Xemxija's Mistra village, Ta' Cassia Restaurant, in Qawra, Pender Place and the Palms, in St Julians, the Galaxy Hotel and Crowne Plaza in Sliema.

If you thought construction activity in Sliema - a town synonymous with tower cranes - will soon tail off, you should think again. Figures obtained from the Malta Environment and Planning Authority show there are over 60 pending applications to pave the way for hundreds of apartments. Most of the applications say that existing houses will be pulled down to be replaced by flats, while others will be built over existing structures.

There are over 30,000 vacant properties in Malta. One property negotiator, who preferred to remain unnamed, said several developers were already realising that supply is far exceeding demand.

"I've been in the business for several years and for the first time I'm seeing a surplus of flats... and by the end of the year it will be much worse.

"People evidently believe the best investment is in property and everyone has now turned into a 'developer'," he added. Some investors are already feeling the pinch of the glut. "While in the past we used to chase contractors to provide us with properties, now they're chasing us to help them sell," the estate agent said.

Another property dealer was more optimistic and said many people still perceived property as the best investment and believes the turnover will persist, albeit at a slower rate. The estate agent was also pinning his hopes on the encouraging number of foreigners who were investing in property.

It is of little consolation to residents and environmentalists who continue fuming in a cloud of dust and protesting at the level of fumes generated by the increasing traffic. Astrid Vella, spokeswoman for Flimkien Ghal Ambjent Ahjar, is perturbed with the "insidious number of little projects" taking place in Sliema.

Five houses in Don Rua Street, located in one of the quaintest areas of the town, will be demolished to make way for apartments, Ms Vella said. Likewise, there are applications for no fewer than 70 new apartments in Sir Arturo Mercieca Street while plans are in hand for the demolition of six blocks in Howard Street.

"Some will keep the façade (of the old properties), others won't, while others will be 'accidentally' demolished," she said.

"We don't need so many apartments. It's as simple as that. I called an estate agent recently who told me they had no fewer than 2,000 apartments in Sliema alone on their books." In spite of the Environment Minister's claims that Sliema was better off with the local plans, in reality it had given the go-ahead for higher rising buildings in the town's back streets, she protested.

Ms Vella asked whether the authorities were taking into consideration the pressure such construction activity was exerting on the infrastructure.

Building Industry Consultative Committee chairman Robert Musumeci said that part of the fee paid to Mepa when submitting an application is specifically directed to fund the necessary upgrading to meet new exigencies driven by new development. Asked whether critics are justified when they say that new apartments are shorn of any design, let alone imagination, Mr Musumeci replied: "When applications are being assessed, too much focus is directed to ensure that proposals are in line with measurements laid in Mepa's policy guidelines, leaving little time to debate aesthetics."

Ironically, policy guidelines are interpreted rigidly by case officers, although they are meant to be used as guidelines, and, therefore, limit creativity.

"It is thus unfortunate that Mepa's personnel tend to focus on quantitative standards rather than on the final aesthetic product. On the other hand, one cannot overlook the fact that case officers are typically reluctant to depart from established guidelines for fear of being eventually slammed by Mepa's own audit office for breaching the regulations.

"We are living in a time where older structures are paving the way for new development. Thus, we have an opportunity to create better buildings. Mepa should remember that creativity should prevail".