The most alarming statistic to emerge from the 2005 Census was the 48.7 per cent increase in vacant dwellings since the previous Census in 1995. In absolute terms, vacant dwellings, which stood at 35,723 in 1995, shot up to 53,136.
The increase can also be seen in the context of the total housing stock. In 1995, 23 per cent of the total were vacant; in 2005 this increased to 27.6 per cent of the 192,314 units available.
The vacancy rate in Malta has been in every census since 1842, peaking at 29 per cent in 1881. There are double figure percentages found in all censuses except 1957, which strangely gives this at 4 per cent.
Malta is not unique in this respect. Comparisons with vacant dwellings in the EU countries show high vacancy rates at 23.1 per cent for Cyprus, 35.44 per cent for Greece and 29.5 per cent for Portugal. These countries, like Malta, have strong family ties, so it may be that there is residential hoarding in these countries for owners' offspring.
At the other end of the scale, Sweden has a vacancy rate of 1.67 per cent, the Netherlands, 1.97 per cent, and Luxembourg, 2.3 per cent. For the proper functioning of the property market a vacant stock of 4-5 per cent is necessary. European statistics indicate that, where the vacant percentage is below 5 per cent, the market may be considered to be working inefficiently.
But is this inefficiency carried over when the vacancy rate is in the region of a quarter of the total housing stock available?
Considering Malta's scenario, this does not appear to be the case, since property hoarding appears to be a favoured investment medium, due to property's perceived capital growth rates. This appears to be corroborated by the situation in Cyprus, Greece and Portugal.
Thus a high property vacancy rate may have more of an adverse effect on our surroundings and built environment, considering our limited size, than on the functioning of the property market.
On the plus side, these vacant properties would come to good use if a natural disaster were to hit Malta, as the homeless would not have to be housed in tents or makeshift accommodation for years on end. A previous study undertaken showed that sufficient vacant properties exist for such a scenario.
The census also gives data on the home ownership rate, which stands at 75.2 per cent, a figure that has been rising steadily over the decades.
Nearly total home ownership for the Maltese islands is expected by 2050, extrapolating current trends.
However, the rate has slowed down between 1995 and 2005. Why? Are the Maltese considering mobility to be more advantageous to owning their residence, or are recent double-digit annual price increases putting property out of reach a greater number of households?
The annual house price growth for the initial seven years since 1995 was 5.2 per cent per annum, while for the final three years of this intercensal period annual house price growth averaged 18 per cent. For 2007, this growth now stands at 0.75 per cent per annum.
Correlating this with the Housing Quality Survey carried out by the Malta Environment and Planning Authority (Mepa) in 2000, which identified a home ownership rate of 73 per cent, it is apparent that a slowdown occurred from 2002.
However, this has not deterred developers from embarking on residential developments, as noted in the number of residential applications submitted to Mepa over the years, as noted in Table 2, which shows a slowdown over 1999-2000, followed by a surge from 2001 onwards, reaching 10,409 in 2006.
This number has to be compared to Mepa's housing requirement calculation in 2001, which was just 2,850 units per annum.
The supply calculation over a 20-year period, excluding existing vacant properties, was given at 95,000, which averages out at 4,750 units per annum. This calculation needs to be adjusted to reflect the recent Schemes Rationalisation Exercise in which more land was given for development. Nonetheless, it is clear that over the past five years, supply has been rising considerably higher than demand.
In fact, the number of properties actually bought - as evidenced from the number of contracts - has gone down to below 11,000, while in 2002 these stood at above 12,000.
Although there is all this supply, experience has shown that the Maltese property market has never collapsed. The Maltese hold on to property as an investment, so this supply is only notional. The market can function perfectly well with all these vacant properties, as the census has revealed over the past century.
The increase can also be seen in the context of the total housing stock. In 1995, 23 per cent of the total were vacant; in 2005 this increased to 27.6 per cent of the 192,314 units available.
The vacancy rate in Malta has been in every census since 1842, peaking at 29 per cent in 1881. There are double figure percentages found in all censuses except 1957, which strangely gives this at 4 per cent.
Malta is not unique in this respect. Comparisons with vacant dwellings in the EU countries show high vacancy rates at 23.1 per cent for Cyprus, 35.44 per cent for Greece and 29.5 per cent for Portugal. These countries, like Malta, have strong family ties, so it may be that there is residential hoarding in these countries for owners' offspring.
At the other end of the scale, Sweden has a vacancy rate of 1.67 per cent, the Netherlands, 1.97 per cent, and Luxembourg, 2.3 per cent. For the proper functioning of the property market a vacant stock of 4-5 per cent is necessary. European statistics indicate that, where the vacant percentage is below 5 per cent, the market may be considered to be working inefficiently.
But is this inefficiency carried over when the vacancy rate is in the region of a quarter of the total housing stock available?
Considering Malta's scenario, this does not appear to be the case, since property hoarding appears to be a favoured investment medium, due to property's perceived capital growth rates. This appears to be corroborated by the situation in Cyprus, Greece and Portugal.
Thus a high property vacancy rate may have more of an adverse effect on our surroundings and built environment, considering our limited size, than on the functioning of the property market.
On the plus side, these vacant properties would come to good use if a natural disaster were to hit Malta, as the homeless would not have to be housed in tents or makeshift accommodation for years on end. A previous study undertaken showed that sufficient vacant properties exist for such a scenario.
The census also gives data on the home ownership rate, which stands at 75.2 per cent, a figure that has been rising steadily over the decades.
Nearly total home ownership for the Maltese islands is expected by 2050, extrapolating current trends.
However, the rate has slowed down between 1995 and 2005. Why? Are the Maltese considering mobility to be more advantageous to owning their residence, or are recent double-digit annual price increases putting property out of reach a greater number of households?
The annual house price growth for the initial seven years since 1995 was 5.2 per cent per annum, while for the final three years of this intercensal period annual house price growth averaged 18 per cent. For 2007, this growth now stands at 0.75 per cent per annum.
Correlating this with the Housing Quality Survey carried out by the Malta Environment and Planning Authority (Mepa) in 2000, which identified a home ownership rate of 73 per cent, it is apparent that a slowdown occurred from 2002.
However, this has not deterred developers from embarking on residential developments, as noted in the number of residential applications submitted to Mepa over the years, as noted in Table 2, which shows a slowdown over 1999-2000, followed by a surge from 2001 onwards, reaching 10,409 in 2006.
This number has to be compared to Mepa's housing requirement calculation in 2001, which was just 2,850 units per annum.
The supply calculation over a 20-year period, excluding existing vacant properties, was given at 95,000, which averages out at 4,750 units per annum. This calculation needs to be adjusted to reflect the recent Schemes Rationalisation Exercise in which more land was given for development. Nonetheless, it is clear that over the past five years, supply has been rising considerably higher than demand.
In fact, the number of properties actually bought - as evidenced from the number of contracts - has gone down to below 11,000, while in 2002 these stood at above 12,000.
Although there is all this supply, experience has shown that the Maltese property market has never collapsed. The Maltese hold on to property as an investment, so this supply is only notional. The market can function perfectly well with all these vacant properties, as the census has revealed over the past century.