Third MPA auction this month

Property worth over Lm2.5 million has already been sold by auction by Malta Property Auctioneers Ltd, and this month over 20 worth over Lm3.5 million are expected to come under the hammer at the third quarterly auction.

"Because a property is on auction, people think there are problems," Malta Property Auctioneers managing director Pierre Faurè told The Sunday Times last week. "This is quite the contrary. Properties are selling because of the amount of exposure they get from MPA through the advertisements we place regularly in the local media and because of the prices being asked."

MPA are very fussy on the pricing of the property, he pointed out. "We give valuations that we believe are fair in today's market, and the prices reflect those valuations, not what the vendor thinks the property is worth."

Property demand

The demand for property has remained constant over the past two to three years, Mr Faurè affirmed. "The only difference is that today a large quantity of properties have become available at the same time, so supply has increased, but the demand has remained constant.

"It is difficult to increase demand unless from outside the local market, and this can only be achieved by assistance and investment by the local Government."

Over the past two years the types of foreign purchasers in Malta have been in the upper level of the market, with budgets over Lm200,000 mainly due to the favourable tax regime in Malta.

"We are seeking to get more expensive properties on our books," he added. "A large percentage of the high end properties on our books have been sold due to upper scale clientele Malta Property Auctioneers are attracting.

"These clients are familiar with property auctions abroad, and we are now experiencing a certain demand for these upper end properties, including large villas with pools or large gardens and upper end apartments or penthouses."

The biggest issue

To counter a common misconception, Mr Faurè said: "It is a fact in the auction industry that the higher the demand for a property the better the chances that the vendor will get a more favourable price by going through the auction process.

"It is only common sense that if you have a property in a high demand area, and is located in a desirable area such as Madliena or Sliema, it makes much more sense to put that property on auction than through the normal real estate channels because the key and most important thing in selling a property is exposure, including a well organised and well funded advertising campaign.

"Once a property is well located and reasonably priced, through our advertising campaign a quantity of potential purchasers will be exposed to the properties on auction, naturally creating a greater interest and in this case having potentially several people bidding against each other during the auction."

With real estate companies having thousands of properties listed on their books, individual properties often get lost, Mr Faurè pointed out. "MPA advertises a maximum of 20-30 lots and each advert in the local newspapers and monthly magazines includes all the lots at the respective quarterly auction.

"Therefore, a vendor is pretty much guaranteed that his property is going to be exposed and advertised in the local market a minimum of four to five times a week. Apart of the advertising costs, daily website maintenance MPA also pay for all the Researches done on each of the Lots prior to the auction.

"So, unless MPA believes it is capable of selling that property within the two- or three-month time window for that action, we will not accept registering the property in the auction."

Five factors

Mr Faurè summarised the MPA credo in five major factors. These are:

• To use our knowledge and experience in real estate sales in focusing attention and excitement on every individual property.

• Vast and concentrated advertising campaigns for the property to be sold in a relatively short period of time.

• Offer a fair and transparent transaction especially in the case of Lots owed by more then one vendor.

• We offer unconditional Preliminary Agreements that are set in advance, therefore eliminating contingencies.

• We offer accelerated sales where quick closing is the norm compared to a property being on the market for many months.

MPA are fully committed to investing both financially and in terms of commitment to sell a property once they have full faith in it. They have know-how to market the property professionally and use it to sell the property successfully.

"The only satisfied client is the one you have sold a property to or for," Mr Faurè said.

MPA also works closely with local real estate agents to sell properties that have been registered for auction. "We welcome any real estate agents who wish to show the properties on auction, they can do so and, if they receive any unconditional offers for a property prior to the auction date that are satisfactory to our vendors, we would be willing to share the commission," he confirmed.

September auction

Three highlights of this month's auction, being held on September 29, are an unconverted palazzo in Valletta (Lot 7). Set on three floors, it consists of 12 rooms around a central courtyard. There is a mezzanine with a separate entrance and a garage. Guide price: Lm140,000-Lm150,000.

A double fronted town house in Lija (Lot 17) includes a large formal sitting room with functional fire place, separate dining room, living area, study, four double bedrooms and two bathrooms and one-car garage. The garden is 154 m2, with a well and three rooms at the back. The guide price is Lm280,000. An eight-car garage next door to the property is also available for an added Lm65,000.

Gozo is attracting its fair share of properties with a double fronted town house in Gharb (Lot 6). Tucked away in a little alley leading to the main square, it consists of three double bedrooms, bathroom, fitted kitchen, separate living room dining room with fireplace and a large, spectacular mill room overlooking a large, mature garden. Guide price: Lm120,000-Lm130,000.

With 21 lots on the auction, the cut-off date for registration is on Tuesday.

"The guide prices on any Lot are there to indicate the initial bidding price and not necessarily the market value nor the price at which the property will be sold, " Mr Faurè explained. "This is what presents a good bidding opportunity to any purchaser."