'Exponential' growth in apartment applications
Property development in Malta and Gozo is currently far in excess of the islands' needs and the growth in the number of building applications for apartments is "reaching exponential levels". The Malta Environment and Planning Authority (Mepa) does not...
Property development in Malta and Gozo is currently far in excess of the islands' needs and the growth in the number of building applications for apartments is "reaching exponential levels".
The Malta Environment and Planning Authority (Mepa) does not have a remit to stop any development presented within the correct application process and cannot intervene in the market to ration development, according to Mepa officials Godwin Cassar and Saviour Formosa.
Mepa statistics, released following a request from The Times Business, show that in the first nine months of this year, 8,826 dwelling units were granted a permit, most of which are for apartments.
This follows two successive years in which a total of 16,500 applications for apartments was approved - and these figures do not take into account applications for some 2,000 more units still under an outline application.
According to the 2002 Structure Plan, Malta needs only 1,800 dwelling units per year to accommodate new households.
Asked to comment on this situation of oversupply, Mr Cassar, Mepa's director general, said: "In the long term I do not think the situation is sustainable and I expect the market to correct itself.
"As an authority we cannot possibly intervene and ration the development in the pipeline. I think the government should take the lead in making interventions in the old urban cores of Valletta and the Three Cities, which, over time, have been largely depopulated." This should drive the construction industry to gear itself for large-scale rehabilitation, he added, rather than new building.
"This would tie into the proposals for the Grand Harbour redevelopment and instigate community involvement in the area." With over 53,000 vacant properties identified in the 2005 Census and a property market clearly fuelled by developer demand rather than need, Mepa's statistics-gathering is becoming increasingly important in identifying emerging trends.
According to Dr Formosa, Mepa's information manager, the authority has over the last years reviewed the contents of dwelling applications file by file and is conducting a monthly exercise to filter the findings. This data is currently released annually but the intention is to release it semi-annually and eventually even quarterly.
"More investigation is required to understand why there is such a large stock of both old and increasingly new vacant units. Some apartment block developments can be sustained with the sale of a few units on plan," he pointed out.
"Developers are free to choose to leave the development unfinished until more buyers come along. The price is constantly appreciating anyway."
The growth in applications for apartments is decelerating: Applications increased from 5,265 in 2004 to 7,539 in 2005 (+43 per cent) and to 8,961 in 2006 (+19 per cent).
This growth is in sharp contrast to other types of developments, including maisonettes and terraced houses, which have more or less remained static since 2000. This, according to Dr Formosa, is an indication of affluence, although there is no guarantee that these developments may not eventually be converted into apartment blocks.
One of the most noticeable traits is the rapid rate of one-to-many transformations: In 2006, 727 units were demolished and replaced by 4,150. Private estates are exploding and are now the norm in places like Zebbug, Attard and Zejtun, following trends in the Northern Harbour region.
Mepa might not be able to ration development within development zones but it can do so outside them. In fact, the percentage of developments Outside Development Zones (ODZ) has fallen from 5.5 per cent in 2001 to 1.5 per cent last year.
Similarly, building on virgin land has fallen from 70 per cent of all development in 2000 to 40 per cent in 2005.
The trend now is towards redevelopment and high-rise buildings. Commenting on this development, Mr Cassar said: "We must be very careful here since there are only limited locations where high-rise buildings may be developed without negative impact on the existing skylines.
"I feel the trend should be more directed towards medium-rise developments. Legislative instruments are required to facilitate large-scale redevelopment of run down sectors in built-up areas. This would address issues of consolidating property rights, which can enable redevelopment in an integrated fashion rather than plot-by-plot development."
There are many other issues that need to be addressed, such as the open space around developments, rather than just within the boundary; the amount of recreational space; the need for light and clean air; and even wind factors, especially with multiple high-rises in close proximity.
The situation is different in Gozo. Dr Formosa said Gozitans tended to prefer to live in terraced houses rather than apartments.
"The reasons are many: Issues of inverse psychology where they prefer larger personal space when living in a doubly insular and small space; as well as economic, where the high proportion of returned migrants serves an additional input to the market," he observed.
"Environmental impact assessments are excellent tools but Maltese should not underestimate the importance of social impact."
The Malta Environment and Planning Authority (Mepa) does not have a remit to stop any development presented within the correct application process and cannot intervene in the market to ration development, according to Mepa officials Godwin Cassar and Saviour Formosa.
Mepa statistics, released following a request from The Times Business, show that in the first nine months of this year, 8,826 dwelling units were granted a permit, most of which are for apartments.
This follows two successive years in which a total of 16,500 applications for apartments was approved - and these figures do not take into account applications for some 2,000 more units still under an outline application.
According to the 2002 Structure Plan, Malta needs only 1,800 dwelling units per year to accommodate new households.
Asked to comment on this situation of oversupply, Mr Cassar, Mepa's director general, said: "In the long term I do not think the situation is sustainable and I expect the market to correct itself.
"As an authority we cannot possibly intervene and ration the development in the pipeline. I think the government should take the lead in making interventions in the old urban cores of Valletta and the Three Cities, which, over time, have been largely depopulated." This should drive the construction industry to gear itself for large-scale rehabilitation, he added, rather than new building.
"This would tie into the proposals for the Grand Harbour redevelopment and instigate community involvement in the area." With over 53,000 vacant properties identified in the 2005 Census and a property market clearly fuelled by developer demand rather than need, Mepa's statistics-gathering is becoming increasingly important in identifying emerging trends.
According to Dr Formosa, Mepa's information manager, the authority has over the last years reviewed the contents of dwelling applications file by file and is conducting a monthly exercise to filter the findings. This data is currently released annually but the intention is to release it semi-annually and eventually even quarterly.
"More investigation is required to understand why there is such a large stock of both old and increasingly new vacant units. Some apartment block developments can be sustained with the sale of a few units on plan," he pointed out.
"Developers are free to choose to leave the development unfinished until more buyers come along. The price is constantly appreciating anyway."
The growth in applications for apartments is decelerating: Applications increased from 5,265 in 2004 to 7,539 in 2005 (+43 per cent) and to 8,961 in 2006 (+19 per cent).
This growth is in sharp contrast to other types of developments, including maisonettes and terraced houses, which have more or less remained static since 2000. This, according to Dr Formosa, is an indication of affluence, although there is no guarantee that these developments may not eventually be converted into apartment blocks.
One of the most noticeable traits is the rapid rate of one-to-many transformations: In 2006, 727 units were demolished and replaced by 4,150. Private estates are exploding and are now the norm in places like Zebbug, Attard and Zejtun, following trends in the Northern Harbour region.
Mepa might not be able to ration development within development zones but it can do so outside them. In fact, the percentage of developments Outside Development Zones (ODZ) has fallen from 5.5 per cent in 2001 to 1.5 per cent last year.
Similarly, building on virgin land has fallen from 70 per cent of all development in 2000 to 40 per cent in 2005.
The trend now is towards redevelopment and high-rise buildings. Commenting on this development, Mr Cassar said: "We must be very careful here since there are only limited locations where high-rise buildings may be developed without negative impact on the existing skylines.
"I feel the trend should be more directed towards medium-rise developments. Legislative instruments are required to facilitate large-scale redevelopment of run down sectors in built-up areas. This would address issues of consolidating property rights, which can enable redevelopment in an integrated fashion rather than plot-by-plot development."
There are many other issues that need to be addressed, such as the open space around developments, rather than just within the boundary; the amount of recreational space; the need for light and clean air; and even wind factors, especially with multiple high-rises in close proximity.
The situation is different in Gozo. Dr Formosa said Gozitans tended to prefer to live in terraced houses rather than apartments.
"The reasons are many: Issues of inverse psychology where they prefer larger personal space when living in a doubly insular and small space; as well as economic, where the high proportion of returned migrants serves an additional input to the market," he observed.
"Environmental impact assessments are excellent tools but Maltese should not underestimate the importance of social impact."