AD calls for more affordable housing
Alternattiva Demokratika has called for more affordable housing through a mix of measures by the state and the private sector.
Michael Briguglio, AD's spokesman for Social and Economic Development, said that while rent-law reform couldhelp ease future increases in house prices, vulnerable groups should be the target of social welfare in relation to housing. These included first-time buyers who could be helped through schemes such as government subsidies on bank loans; as well as provision of affordable social housing for low-income earners.
Mr Briguglio added that other vulnerable groups who deserved attention, included persons entering pensionable age who were not home-owners and small enterprises that could not cope with property costs.
Increased expenditure on housing policy could be financed through disincentives on property speculation from an owner's third vacant property onwards.
AD also proposed the introduction of fiscal mechanisms to encourage the renting of properties kept vacant for speculation purposes, and aid for people to refurbish their old property.
AD chairman Arnold Cassola urged banks to take a more ethical stance with regard to house loans, introducing better incentives for groups such as first-time buyers. He said AD believed the government should give housing policy more importance in the forthcoming budget.
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Michael Falzon
Sep 6th 2008, 19:17
Whio decides what is affordable and what is not? Michael Briguglio?
Kevin Borg
Sep 6th 2008, 16:16
@ I Abela
It looks like either you do not have an idea of economics or you do not follow the local market. Property prices this year have decreased by almost 10 percent. In some cases were the developer was in dire need of cash the prices even went further below the 10 percent threshold. The market takes time to adjust itself and these are the first signs that it is slowly doing so.
And if you feel you are in the lower poor class rest asured we are not with you. Class is not only dictated by money. If so ic-Caqnu will be the classiest of us all. To get yourself out of the lowest dump improve yourself, get a better career and move on. The time for petty mercy is out.
As for the goverment 'DICTATE' option. When the goverment intervened and started to give away property by the bulk we all know what was the result! The mess we have today in the property market was planted in those dreadfull 1980's, were land for development was being masacared without any planning at all. The portions of land allocated were exxesive.
A Camilleri
Sep 6th 2008, 15:45
@ I Abela. Economic principles always apply. There may be particular/peculiar aspects, in our case the limited supply / size of the country, but supply and demand rules always apply. The decision to increase the height in various localities by another storey has increased supply. It took some time between the decision (to relax height limitations) and the arrival of additional units on the market, for logistical reasons. Prices have already stabilised somewhat, though I agree they are still 'unaffordable'. Buyers are reporting better 'discounts'. I believe there will be a price correction which sometimes swings the other way round as happened in the stock exchange. It will not be helped by government grants though! Neither can it be corrected by dictating prices. Can you imagine realistic criteria for dictating property prices? Even within the same block of flats, similarly sized units attract different prices, let alone across the country. Imagine it's done by a magic formula. Soon after there will be purchasers willing to pay some kind of additional undeclared monies to outbid others. Only the market can dicate the prices, not least the purchasers' willingness to pay the prices asked for. Having no other option is another matter.
I Abela
Sep 6th 2008, 15:10
Unless government starts to DICTATE property prices there is no hope for affordable housing. This will obviously never happen for various logical and illogical reasons. For those who think that someday property prices will start going down (some say inevitably) think again. Basic Economic principles don't apply to the property market of Malta. ie More supply than demand = lower prices. This can only happen when the seller wants to sell at all costs thus lower the price to make it more attractive. In Malta, property sellers are more than willing to hold on to there property until they get (someday) what they are asking for. So better start saving up and doing some overtime and maybe find 1 or 2 part time jobs, if you want to buy a property. PS for most of you who are in this situation and beleive you are among the middle class, you are so wrong. You are in the lower (poor) class as much as I am.
A Camilleri
Sep 6th 2008, 14:44
The bottom line is that, create a grant / subsidy/ increased loan etc for say Eur 25,000 and it will only serve to push the price of what is marked at Eur90,000 to Eur115,000. That's some favour for purchasers! If anything they have to pay a higher stamp-duty to purchase the same unit. That's what happened in the past as a result of:
a) over the years there are more both-partner working couples
b) banks reduced the front contribution required on a loan
c) loans are based on higher salary multiples
A Camilleri
Sep 6th 2008, 14:27
Most subsidies, though well-intentioned, end up enhancing the developers' profits. The smaller apartments will always be price-postioned to target the largest catchment segment, young couples. Assuming a salary of Eur10,000 each, they can raise around Eur80,000 in loans and maybe contribute Eur10,000 from saving/parent's donations. In the market, couples are willing to use the maximum budget they can raise to obtain whatever is available in the market. You will therefore find a lot of units in the region of Eur90,000 even though these size of these units is getting smaller over the years.
As soon as there are any market changes such as:
a) banks increasing the salary multiple they're willing to lend
b) new subsidies available
the resultant increase will only get you the same unit. Developers, stimulated by an increased demand in that price-bracket adjust their prices upwards.
Government grants/other schemes should be designed in such a way so as not to continue to fuel prices upwards.
Utimately the best hope for affordable prices that the oversupply pushes prices downwards, though developers tend to horde their units considering them as an investment which will always increase in value as they wait. At some stage, a downward-spiral is inevitable.
Ronnie Gauci
Sep 6th 2008, 13:29
Affordable Housing?? That would be the day!
A.Gauci Cunningham
Sep 6th 2008, 11:12
Mr.Briguglio?? The one who voted MLP in the last election and flaunted it on Xarabank?? So he's back !!