Property prices start recovery
Property pprices rose by 0.38 per cent in the first quarter this year, compared to the corresponding period last year.
The National Statistics Office said the rise primarily reflected an increase of 2.08 per cent in the apartments index. The price of maisonettes fell by 0.22 per cent.
The increase in property prices was the first since the last quarter of 2008.
The all-transactions volume index showed that the number of transactions in the first quarter this year increased by 3.93 per cent when compared to the corresponding period in 2009.
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22 Comments
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A. Brincat
Jul 28th 2010, 20:01
I agree with C Cassar.
In addition to this one must mention that property sales have rebounded slightly as there was a wait from buyers in the last quarter of 2009 and first quarter of 2010 due to uncertainty.
Now that demand has been filled during the second quarter and is expected to remian so in the third quarter. However once this short burst is satisfied demand will revert back to normalised levels.
There is some concern by property agents at the moment as they are not selling as they used to a couple of years ago. This says it all. Some experts in the market are even saying that in reality property sales will only show healthy increases only in about five years time. What is healthy will need to be defined.
Nina Abela
Jul 28th 2010, 19:14
Property prices start recovery Good News for whom the owner or the buyer. As for me a first time buyer it is certainly a big blow yet again, i might even invest in a caravan its much cheaper.
C Cassar
Jul 28th 2010, 20:21
Why do you need to buy a property? Why not just rent? That's what most people in the rest of Europe (excluding the UK) actually do and they don't complain. No one has a right to own a property.
Margie Felix British
Jul 29th 2010, 15:42
Yes thats well and good Nina, but by renting we are making some big fat greedy cat maltese rich and they are laughing all the way to the bank on our behalf, do you really think its a good idea to rent and find that the cost of renting tends to go up now and then, some pwners haven even 2 or 3 properties only god knows how they fill in their yearly tax forms.......(?) i live on the calypso island of Gozo but not for Long i've seen the light at the end of the tunnel as they say.
C Cassar
Jul 28th 2010, 16:04
There are two distinct markets in Malta, one being the badly designed, ugly and badly located properties which make up the vast majority of what is available in Malta. The other being those high quality properties in very upmarket developments for which there is a clear undersupply. It is this second category that interest the vast majority of foreign buyers/owners. This market will continue to grow (as well as prices which have never dropped or even stood still) normal supply/demand forces. These properties will always be in heavy demand since there is limited land capacity for these developments with the Maltese islands.
To talk about the 'property' market in Malta as if it was one entity is common amongst those with little property business knowledge.
smifsud
Jul 28th 2010, 15:39
the property in malta is way overpriced ..this is insane of whats going on our island ..workers are forced to taking austerity measures on there jobs so this inturn will kill any momentum in rise of sales of property ,,,we are going back to living with family in one home with 10 or 12 people living iin one house ...the smoke and mirror show continues in malta ...i think we live in lala land here and we are going to learn the hard way ...i hope not but the day will come to realize that we are not the center of the world ....we will be punished for taking this attitude ....
l aquilina
Jul 28th 2010, 14:15
Two factors will dominate price in the current market, and price eventually determins sale:
1. Demand and supply, and we all know that our market has a glut of property, a substantial amount of which with almost negligible potential to sell owing to bad planning and design.
2. The era of viewing property as future ROI (when one considers capital plus loan interest) has ended, well at least for the forseeable future.
Lorraine Vella
Jul 28th 2010, 14:03
A 2 bedroomed flat in Mellieha (not the most beautiful part either) costs E115,000. A 2 car garage in M'scala costs Lm17,000. Mgarr 3 bedroomed flat costs E100,000. Shell or semi-finished. Does it mean now that prices will keep on increasing???????
Emily caruana
Jul 28th 2010, 13:42
In the street where i live in sliema the oversupply is clearly seen. Three blocks of apartment which were build two/three years ago and only two apartments are occupied until now with another huge block which consist of 20 apartments almost finished. I really admire their determination!
A.Mifsud
Jul 28th 2010, 13:21
The property bubble has not burst as yet. The truth is that on the market there is an over supply and not enough individuals wanting to buy property at todays' market prices. The expected rush of foreigners wanting to purchase property in Malta as an investment or otherwise, simply did not materialise as there are better bargains on neighbouring land. The problem with property in Malta is self inflicted and has nothing to do with the recent global economic turmoil. We keep building charmless and expensive blocks of apartments and expect people to purchase at unrealistic prices.
Charles Muscat
Jul 28th 2010, 13:11
I assume wages have gone up too.
martin saliba
Jul 28th 2010, 13:52
Ask the people who work at kirkop
Joe Borg
Jul 28th 2010, 12:46
I wonder if the price of property was ever affected at all - and i question all this commotion about the supposed buyers' market -
when i inquired about an underground 1 car garage - the price in a so called "time to invest in property" was still a whopping € 10,000
Kevin Zammit
Jul 28th 2010, 11:42
0.38% now constitutes an increase in prices ?
Can we please have the error margin that the method used to calculate this figure carries?
Dominic Vella
Jul 28th 2010, 14:32
Yes, statisticians would normally publish a margin of error or a confidence interval. They have sampled only 1,000 transactions, and then mix weighted the numbers. Who knows, the margin for error could be + or - 2.00% so the 0.38% they give is meaningless.
They used to sample 1,500 properties and they used to show a lot of charts in their press releases, but no more. Could it be that the NSO is not neutral and prefers circumstance when it can cheerlead property prices rising?
D. A . Agius
Jul 28th 2010, 11:38
Let's Compare:
In Scotland, not a central area but within a Town: Ground Floor Flat, 2 Bedrooms, 1 Reception Room, Double Glazed & Centrally Heated, Where Specified), Front & Rear Gardens , Off Road Parking. This is what in Malta would be called a Maisonette.
In Malta, not a central village: Very quiet and central area, spacious three bedroom elevated ground maisonette, two bathrooms, backyard, fully furnished.
No one would question that the salaries between Malta and the uk vary quite subsantially.
Price in UK: EUR125,000
Price in Malta: EUR 130,000
If our properties are not overpriced, you must be living on the Moon!
Ian Galea
Jul 28th 2010, 11:52
I am not contradicting what you are saying but keep in mind that the price of a property is not the one at which it is advertised but the one at which it is sold.
Peter Korsten
Jul 28th 2010, 12:02
But who wants to live in Scotland, the country that invented the deep-fried Mars bar? :)
Seriously, salaries within the UK differ substantially as well. Someone from Northumberland or Scotland does not earn the same as someone from central London. So your comparison has so many variables and uncertainties that it doesn't make a lot of sense.
E Gatt
Jul 28th 2010, 12:11
It's all a matter of demand and supply and not a comparison of salaries in Malta and Scotland. Malta, unlike Scotland, is densely populated, so this pushes up demand.
If people feel that the price of property is going to increase in the future, then they will look at buying property as an attractive investment.
Prices can also increase if disposable income (including salaries) increases.
D. A . Agius
Jul 28th 2010, 13:22
Well, I agree that many variables need to be taken in place, but I've been told quite often that the ratio between annual salary and cost of a normal residence in Malta is higher than in other countries.
Also, when one takes into account that 20% or more of properties lie empty, I believe there is already an over supply. Maybe in Malta we have not started seeing re-possessions and bankruptcies as has happened in other countries. Certainly hope it does not happen, but considering that:
demographically the population of Malta will be going into a decrease (when the baby boomers start passing away)
families now try to restrict to an average of one child, possibly a second
different family units
people who decide not to bring children
where is the demand?
What definitel there may be demand for is affordable housing of a decent level. One advert i saw the other day was for a hole in the wall hamrun (one bedroom, bathroom, kitchen), still unconverted and asking for E50,000 or more... come on!
Jonathan Agius
Jul 28th 2010, 14:42
E. Gatt,
Unfortunately you know not what you are saying.
Supply in Malta by far outstrips demand; you cannot say the same for Scotland.
Besides, property is not an attractive investment becuase demand for housing units in Malta will fall as well. Having a look at the population pyramid will tell you why this is the case.
Asking prices have only gone up because sellers think that they can still sell to foreigners.
Adrian Sciberras
Jul 28th 2010, 11:29
it wont recover for years... prices will not move until the supply is taken....