Frank Salt believes the Maltese property market is unique and is not facing any problems due to the international economic situation. "We have a unique situation here and must understand that we are different to other markets. People here were never bombarded with 120 per cent loans. We don't have that credit mentality. We still have the mentality that if people have the money they buy something. The banks have more of a social conscience here. I don't think there is a problem and we should not create a problem. We should carry on as normal," he told The Times Business in an interview.
He stressed that the perception caused by the foreign media, such as Sky News, is that property is doing very badly. "The media has to be responsible. In the 1960s we used to sell a lot of property to foreigners leaving various African countries. These did not want to go back to the UK, they wanted a warmer climate such as Malta and Cyprus. When Dom Mintoff was elected, he never touched these people or their property, but the perception was there - that here was a man banging a drum and they could be thrown out again. What happened? They all panicked.
"You try and sell property to a foreigner in those days when Mr Mintoff was haggling with Lord Carrington. It was impossible. But a new opportunity arose - to sell to the Maltese. From that moment on the Maltese property market started. From one catastrophe a huge opportunity arose which has lasted 40 years. The same can be said for today's situation. Everyone is leaning over backwards to help people purchase property."
Mr Salt said that the sterling's weakness is certainly worrying and he has spoken to the two main banks in Malta about this. "Forty five per cent of our local business was from the UK and the plunge in the value of the sterling against the euro is certainly cause for concern. I have approached both local banks and loans are now being offered over a five or six year period, interest only, which would give people in the UK plenty of chance to sell their property at the right price, and, maybe when the sterling goes up, they will bring their capital over to Malta to buy their property. When a disappointment takes place you have to try and turn this into an opportunity."
He disagrees that the Maltese property market is overpriced and emphasises that intense competition among developers is good for consumers. "What we have at the moment are two markets: the first and second time buyers market and the luxury, speculative and buy to let market. Let's take the first and second time buyers market - there's a huge selection of property on the market and what is being built today is of a better quality than what was built in the past.
"These developers have put these properties on the market at reasonable prices. Because there are so many of these units, not only are the prices reasonable, they are also open to negotiation. Not only that, but things like kitchens are also included because competition is so healthy. Incentives are given to people to buy one property over the other. This is good for first time buyers. On top of all that you've got interest rates at 3.4 per cent. If this is not an opportunity for first time buyers I don't know what is!"
He insisted, however, that people should stick to their budget when buying property even though interest rates are low, as these can rise again "and they'll get clobbered". "Don't forget that interest rates in Malta were eight per cent for 20 years," he stressed.
Mr Salt has publicly supported large scale high end projects because they are attractive to foreign and or discerning buyers and the real estate companies have often said these projects were selling well. Is there the danger that many of these sales are speculative?
"A lot of these sales are speculative, in the sense that people buy property and then try to sell it or rent it if they can't sell it. The rental market today is huge - it's gone up by leaps and bounds. So the locals will buy property in these new developments, some will try and sell them and others will rent them. Foreigners are also buying into these developments, which is beneficial to Malta.
"Many of these developments are being built specifically for foreigners who bring in huge amounts of money into this country to buy property and to live here. These people are permanent tourists and they should be encouraged just as tourists are encouraged and just as cruise liner passengers are encouraged by the government. They should make it easier for them to get residence permits and to buy, which unfortunately they are not and I think this is a shame. I am doing my best to get the government to change and to bring out the red carpet for these people just as it does for the industry, for example."
Asked about the thousands of properties that lie vacant throughout Malta and Gozo he insists that this state of affairs has nothing to do with real estate and that in any case there is no glut in the market. "There are family problems for example. A developer would build a block of 20 apartments. He'll sell 16 and keep four for himself. He might even keep more than four as that's his way of investing his money. This is happening everywhere. The developer might sell them later on but as far as he is concerned that is his bank.
"I would imagine that the number of properties put on the market amount to about 11,000 or 12,000. They are there either because of family problems - I know families who have up to 100 properties on the market -some of which are just rotting away, which is a pity - yet the head of the family just doesn't want to be bothered with them, or because they are being kept as an investment. There is certainly no glut in the market."
Asked what could be done to help young people get into the property market Mr Salt said he believes both the government and developers are doing all they can to help first time property buyers. "The only problem that exists is that maybe people are not able to buy the property they want in the area they want. But then this happened to me when I first got married. My friends from Sliema were living in places like Tarxien and Zabbar because it's all they could afford. It's the same today although not to same extent."
He insisted that Malta's property market is a solid one not just by accident. "We have a very mature property market, probably one of the most mature sensible property markets in Europe. Ours is a stable market. If for example a young kid can't afford to carry on with his payments temporarily, the family will help him out. He won't be stuck in the rut like in the UK where nobody gives a damn any more. If he's working in Birzebbuġa and living in Tarxien and changes his job to Mellieha he doesn't have to change his house. In the UK if somebody lives and works in London and decides to get a job in Birmingham then he'll have to move to a new address. We don't have such problems here."
Mr Salt said that Maltese investors, many of whom are very fluid cash-wise and weary of financial investments, are happy to purchase property abroad. "The Maltese are happy to buy property abroad for two reasons. One, as an investment and two, as a holiday home. In Sicily, especially in the Ragusa area, we understand that there are about 350 Maltese and Gozitans who purchased property there. For about €350,000 they can buy a three bedroom house with a swimming pool which with 11 tumoli of land is quite an attractive investment, especially since it is so close to Malta. Tuscuny is also popular with Maltese buyers."
He stressed that the perception caused by the foreign media, such as Sky News, is that property is doing very badly. "The media has to be responsible. In the 1960s we used to sell a lot of property to foreigners leaving various African countries. These did not want to go back to the UK, they wanted a warmer climate such as Malta and Cyprus. When Dom Mintoff was elected, he never touched these people or their property, but the perception was there - that here was a man banging a drum and they could be thrown out again. What happened? They all panicked.
"You try and sell property to a foreigner in those days when Mr Mintoff was haggling with Lord Carrington. It was impossible. But a new opportunity arose - to sell to the Maltese. From that moment on the Maltese property market started. From one catastrophe a huge opportunity arose which has lasted 40 years. The same can be said for today's situation. Everyone is leaning over backwards to help people purchase property."
Mr Salt said that the sterling's weakness is certainly worrying and he has spoken to the two main banks in Malta about this. "Forty five per cent of our local business was from the UK and the plunge in the value of the sterling against the euro is certainly cause for concern. I have approached both local banks and loans are now being offered over a five or six year period, interest only, which would give people in the UK plenty of chance to sell their property at the right price, and, maybe when the sterling goes up, they will bring their capital over to Malta to buy their property. When a disappointment takes place you have to try and turn this into an opportunity."
He disagrees that the Maltese property market is overpriced and emphasises that intense competition among developers is good for consumers. "What we have at the moment are two markets: the first and second time buyers market and the luxury, speculative and buy to let market. Let's take the first and second time buyers market - there's a huge selection of property on the market and what is being built today is of a better quality than what was built in the past.
"These developers have put these properties on the market at reasonable prices. Because there are so many of these units, not only are the prices reasonable, they are also open to negotiation. Not only that, but things like kitchens are also included because competition is so healthy. Incentives are given to people to buy one property over the other. This is good for first time buyers. On top of all that you've got interest rates at 3.4 per cent. If this is not an opportunity for first time buyers I don't know what is!"
He insisted, however, that people should stick to their budget when buying property even though interest rates are low, as these can rise again "and they'll get clobbered". "Don't forget that interest rates in Malta were eight per cent for 20 years," he stressed.
Mr Salt has publicly supported large scale high end projects because they are attractive to foreign and or discerning buyers and the real estate companies have often said these projects were selling well. Is there the danger that many of these sales are speculative?
"A lot of these sales are speculative, in the sense that people buy property and then try to sell it or rent it if they can't sell it. The rental market today is huge - it's gone up by leaps and bounds. So the locals will buy property in these new developments, some will try and sell them and others will rent them. Foreigners are also buying into these developments, which is beneficial to Malta.
"Many of these developments are being built specifically for foreigners who bring in huge amounts of money into this country to buy property and to live here. These people are permanent tourists and they should be encouraged just as tourists are encouraged and just as cruise liner passengers are encouraged by the government. They should make it easier for them to get residence permits and to buy, which unfortunately they are not and I think this is a shame. I am doing my best to get the government to change and to bring out the red carpet for these people just as it does for the industry, for example."
Asked about the thousands of properties that lie vacant throughout Malta and Gozo he insists that this state of affairs has nothing to do with real estate and that in any case there is no glut in the market. "There are family problems for example. A developer would build a block of 20 apartments. He'll sell 16 and keep four for himself. He might even keep more than four as that's his way of investing his money. This is happening everywhere. The developer might sell them later on but as far as he is concerned that is his bank.
"I would imagine that the number of properties put on the market amount to about 11,000 or 12,000. They are there either because of family problems - I know families who have up to 100 properties on the market -some of which are just rotting away, which is a pity - yet the head of the family just doesn't want to be bothered with them, or because they are being kept as an investment. There is certainly no glut in the market."
Asked what could be done to help young people get into the property market Mr Salt said he believes both the government and developers are doing all they can to help first time property buyers. "The only problem that exists is that maybe people are not able to buy the property they want in the area they want. But then this happened to me when I first got married. My friends from Sliema were living in places like Tarxien and Zabbar because it's all they could afford. It's the same today although not to same extent."
He insisted that Malta's property market is a solid one not just by accident. "We have a very mature property market, probably one of the most mature sensible property markets in Europe. Ours is a stable market. If for example a young kid can't afford to carry on with his payments temporarily, the family will help him out. He won't be stuck in the rut like in the UK where nobody gives a damn any more. If he's working in Birzebbuġa and living in Tarxien and changes his job to Mellieha he doesn't have to change his house. In the UK if somebody lives and works in London and decides to get a job in Birmingham then he'll have to move to a new address. We don't have such problems here."
Mr Salt said that Maltese investors, many of whom are very fluid cash-wise and weary of financial investments, are happy to purchase property abroad. "The Maltese are happy to buy property abroad for two reasons. One, as an investment and two, as a holiday home. In Sicily, especially in the Ragusa area, we understand that there are about 350 Maltese and Gozitans who purchased property there. For about €350,000 they can buy a three bedroom house with a swimming pool which with 11 tumoli of land is quite an attractive investment, especially since it is so close to Malta. Tuscuny is also popular with Maltese buyers."