Herman Grech
Property deals down 9%
Promise-of-sale agreements for the first quarter of the year are down nine per cent, The Sunday Times has learnt.
Just over 1,800 agreements (konvenji) were signed in the first three months compared with 1,931 last year - and no less than 40 per cent down on the same period in 2007.
Promise-of-sale agreements are normally seen as a good indicator of a market, which has proved to be lucrative for many years. But after the property boom, where hundreds of houses were demolished to make way for small apartments, many are feeling the pinch.
Notary Roland Wadge said the economic situation had also led to more promise-of-sale agreements falling through. This was the general feeling among many notaries, he said.
"There might be different reasons for this but there is certainly an aspect of job security. The recession in this sector started before the credit crunch. Let's not forget that there are too many apartments nowadays and the bubble has burst for many developers - today everybody seems to have become a developer," Dr Wadge said.
Sandro Chetcuti, president of the GRTU's property development division, believes the government should intervene to boost demand and treat the "disease".
"People will invest when there is a feel-good factor. But businesses are suffering, investment funds are down, capital gains tax remains among the highest in Europe, and the only surplus cash is going to the excessive water and electricity bills," he said.
While agreeing that there is an oversupply in the market - Malta has over 70,000 vacant properties - Mr Chetcuti said this was an opportunity for prices to go down.
He reiterated the GRTU's recommendation to government to stop building social housing units and instead buy from the private sector.
Mr Chetcuti said: "Property remains the best investment and it's up to government to help reduce this apathy. It should eliminate stamp duty for property under a certain threshold and do its utmost to lure foreigners to buy."
He said apartments in a recently-built complex in Sliema were selling at some €82,000, well below the original asking price of €151,000.
According to the Central Bank's annual review, the advertised residential property prices indicated an average decline of 2.7 per cent during 2008.
Advertised prices for flats in both shell and finished form, which together make up over half of the sample, were down by two per cent and 5.4 per cent respectively, while those for villas and terraced houses declined by 3.7 per cent and 1.8 per cent.
On the other hand, higher prices were asked for maisonettes in shell form and townhouses. Prices of finished maisonettes and houses of character changed little from 2007.
House prices were falling in practically every European market by the end of 2008 when adjusted for inflation, according to the Royal Institution of Chartered Surveyors.
House prices may be dropping across Europe, but the strength of the euro has put British buyers off destinations which use the euro, such as Malta.
According to the Global Property Guide, Malta's property sector ranks 28th out of the 40 European countries surveyed for economic competitiveness.
But there may be a sign of some light at the end of the tunnel - Dr Wadge said business seemed to have picked up in the last month or so. It remains to be seen whether the global downturn could prove to be a blessing for prospective buyers who have been faced with unaffordable properties for years.
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Stephen Borg Cardona
Apr 28th 2009, 00:33
In Malta you have the best of both world, sea, countryside, city life and cultural activities all rolled into one. In Sicily its only cheap if you are in the middle of nowhere two hours drive from the city etc
Pete Van zoest
Apr 27th 2009, 20:45
Well said Harrison, i couldn't have put it better myself. i heared that Spain and Sicily is a nice clean place and also more affordable then Malta/Gozo, we are actually seriously thinking of uprooting and move to nearby Sicily, the only drawback we most likely come across is the lack of people speaking English, maybe i shall have to sit down and learn italian, but thats not our biggest worry, my main problem is selling our property at a decent price that towards the end i will not be out of pocket, but there is a very big chance now that i probably loose out a vast amount of my capital, paying taxes,and finalising a Possible Sale(???)?? whenever that is. We might be stuck here on the islands for many months yet-worst luck.
C.Harrison
Apr 27th 2009, 14:47
Clifford Davies@ i am afraid although you are absolutly right unfortunitly we are talking through deaf ears, as the Maltese's mentality is Take it or leave it attitude or they just don't care whether to sell, rent or in most cases leave the dwellings empty for months and years on end rather then badge or come clean and lower the value.,so whats the point of it all really as most just cannot see further then their bank balance or their noses in that respect. I think towards the end of this year things will begin to materialize in a more negative spirrel down turn when probably the Banks and the property owners will have to re -think their whole strategy or collapse completly
Ray Sultana
Apr 27th 2009, 11:17
Mr Chetchuti, what about the speculators who have ruined Malta with probably the most horrendous buildings in the world whilst at the same time saturating the market and also pushing up the prices astronomically? They made not only housing unaffordable for Maltese people but also made the island much less attractive to foreigners. As some have commented below, why should foreigners buy property in Malta, when there are places that haven't been ruined by the greed of speculators and are also more affordable?
\j. Abdilla
Apr 26th 2009, 21:48
@Jane Ragoff I totally agree with you but the majority of Maltese are still under the impression that Malta is the only place to invest for a place in the sun or retirement. They do not realise that a better living .envirolment and much cheaper could be found elsewhere.
A.Church
Apr 26th 2009, 20:46
Come on Mr.Davies, its not that bad, ok i come clean yes it is and i reckon the only alternative is for the government to apply certain taxes on eyesore empty dwellings as this is getting out of hand, Gee everywhere we go we see crains blocking the roads,now also live in Gozo,and i swear sometimes i have to go round the block a few times before i can get to my destination due to crains and wardens waving a flag -No Entry. its getting a bit over the top now and like you Mr.Davies we just about had it. It''s like every property developer in Gozo has gone bananas as just everywhere you look there is always a half finished buliding or lime stones ready to be worked, never seen nothing like it,or at least Gozo never used to be like this, what a waste of a lovély country with open fields and fresh air,now i leave that to your imagination gradually it is all disapearing and soon there will be nothing left except flats and dwellings and over populated Calypso Island Its a downright shame we happened to love this country but some are sacrificing it for sheer Greed.
Clfford Davies
Apr 26th 2009, 20:07
I agree verymuch indeed with Jane Rogoff, Yes why indeed would anyone invest in a property in Malta? we made that mistake a couple of years back when we moved to Gozo and i wish to God that i never laid down most of my savings on a property that we've been trying to sell for the past 18 months, nobody is interested even after lowering the value three times, yet no buyers and the is from a possible foreigner, as far a Maltese buying my property simply FORGET IT! no chance Pedro, so i think the damage has been done as alot of Britians are either leaving on a large scale as the sterling will sink further before it start to pick up and lets face it will never match the euro,unless we adopt the euro,and on the other hand Ms.Rogoff mentioned Spain and Sicily which are infact much cheaper and a better and a cleaner envirement, buying a motor car is much lower then Malta, so really all in all, the advantages lie outside Malta and as one would probably say to us as usual :you Should Have Done your Homework Johnny Boy!! too late sunshine.
Peter Aquilina
Apr 26th 2009, 17:44
Well said Mr Kevin Wright.
".........to pay those who have become the parasites of Maltese society."
The word "parasites" suits better than my titling "greedy speculators".
Jane Rogoff
Apr 26th 2009, 16:34
@ J. Abdilla
Why would anyone from abroad come to live to Malta?
In Spain, the coastal area is much more beautiful and you can get a property for a fraction of what one in Malta would cost. Then there's Tuscany, where the story is pretty much the same for mountain-lovers and Sicily. In all these places, the lifestyle is at least as good as in Malta, distance travelled is less from other affluent countries and the place itself is superb (no road potholes, plenty of virgin land, uncontaminated sea, nice air - you know what I mean).
It wou;d be foolish to expect any foreigners to come to live in Malta, unless reference is being made to illegal immigrants. Even the latter will probably want to move on to more beautiful places.
Kevin Wright
Apr 26th 2009, 16:11
When property prices were going up no one came out to say that property prices were going up unrealistically while wages stagnated.
Now that property developers have thrown themselves out of the market - because let's face it, no one in his right mind would buy property at the present prices - they want government to use the money I and other honest working people pay in taxes to keep on sustaining their greed. What cheek !
Luckily government does not have enough money to bail them out ... and if it did it would have been robbing everyone who ekes off a living honestly to pay those who have become the parasites of Maltese society. Let's just hope for that next time government intends to cash in more he does not raise energy prices but introduces a property tax on the vacant dwellings that have become so much of an eyesore and that no one has any use for.
J.Bonnici
Apr 26th 2009, 14:28
We need to discard the notion that the building industry in its present form, now totally disproportionate to the size of the country is in some way indispensible to our survival. It was the lack of control on the industry itself that caused the chaos we are in. The recession only came later. To expect the government to intervene would be immature. My sympathies go to the young couples whose property is worth less than their loans. The men in the sports cars who profited from them should shut up and stop grumbling.
J. Abdilla
Apr 26th 2009, 13:57
Unless property prices in Malta drop by more than 30% the huge stock of unsold and empty appartment and houses will keep increasing. Only the foreigner can remedy this situation, but then again if they do and decide to buy and reside in Malta, can anyone explain to me how the infrastructure of the island is to cope. Malta is already overcrowded as it is, resulting in the high level of noise, pollution and lack of open spaces.
Barrie Smith
Apr 26th 2009, 11:44
The property market has gone from the ridiculous to the extreme, we have serious problems in the UK as far as property sales but by Joe, Malta take the cheery on the cake, not only for property investments but also in the long let sector where some are asking very high monthly rentals., now that many are leaving the islands i have seen no improvements in lowering the rental value of a decent property in both islands. I have learned that many don't even care or bothered whether to leave unsold or unrented properties vacant rather then lowering the asking prices.My conclusion is that Malta and Gozo are turning into a empty grave yard of shell bombed buildings that are an eye soar to this tourist country, no one is buying and no one is renting at least not at present and Malta has started to feel the pinch but this is only a taste, the worse remains to be seen! some property speculators will probably think differently but that's like asking pigs to fly or a miracle to happen...they have rather a long time to wait which by then it will be too late. Its just an opinion