Central Bank survey confirms drop in property prices
Residential property prices drop in the first quarter of this year, according to a survey by the Central Bank published today.
It said that it index of advertised residential property prices, fell for the second consecutive quarter in the three months to March 2011.
The All Property Price Index compiled by the NSO, based on contracted property prices also registered a decline during the quarter.
According to the Bank's index, after having dropped at an annual rate of 2.0% during the previous quarter, advertised property prices decreased by 2.6% year-on-year during the second quarter.
The drop was primarily due to lower asking prices for terraced houses and for properties in the "other" category. Prices for terraced houses declined for the third consecutive quarter, falling by 6.1% on a year earlier. Prices in the "other" category, which consists of townhouses, houses of character and villas, fell by an annual 12.8%, a similar drop to that experienced in the previous quarter.
The prices of maisonettes contracted marginally.
On the other hand, prices of apartments – which make up almost three-fifths of properties surveyed – rose by 1.0% on a year earlier, softening the drop in overall property prices. During 2010, prices for apartments had risen in the first three quarters, before falling slightly in the final quarter.
In the first quarter of 2011, the number of properties advertised for sale contracted by 9.9% on a year earlier, compared with a 12.4% decline in the December quarter.
Meanwhile, the number of building permits issued by the Malta Environment and Planning Authority rose by 25.4% on the corresponding quarter of 2010, mainly due to a base effect as the number of permits issued in that quarter was particularly low. The increase was mostly due to apartments, for which a substantially higher number of permits was issued. On the other hand, there was a fall in the number of permits for the construction of maisonettes and terraced houses.
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Jonathan Camilleri
May 18th, 20:48
Any recent news on the property market? How are real estate agents performing? What (self) employment conditions are being offered? Is it a seasonal high-market employment?
R. Gauci
Aug 26th 2011, 00:00
Property prices are falling yes but so is the quality. If you buy an apartment today is it of the same quality one used to buy 10-15 years ago?? NO!! Today you can only find the so called 'gabubi' + no roof available and still they'll ask you from 80 to 100 thousand euros for them, how they pretend to sell?? Better stay with mummy & daddy in the bungalow they baught for 5,000 euros back in the 80's which can easily accomodate 10 persons comfortably.
Schembri Ray
Aug 26th 2011, 21:50
good point.
Mr Peter Murray
Aug 25th 2011, 19:08
FAO-
MR.JO CAMM and MR.ADRIAN GRECH.I am still awaiting your erudite input into the role ,function and fit for purpose of the Central Bank of Malta nowadays and educate this dilettante.For instead of launching coarse and vitriolic asides .it is the issue that must be addressed not personal attacks which are as unbecoming as they are questionable .My perception of the Central Bank is nothing more nowadays than a puppet entity for the ECB(as is a lot of other eminently more qualified people than myself) yet I notice that its primary aim and objective is to maintain and promote price stability.Hardly a ringing endorsement to say that they have palpably failed in this noble quest is it?Please kindly refrain from senseless and fruitless accusations and provide some wothwhile factual input as I hail from an age when gentlemen did not resort to malodorous response etiquette or tactics.Thank you. Ps -Where are the figures to support the CB's claims in this and an increase in consumer confidence ?
Mr Mark Borh
Aug 25th 2011, 15:39
...and they need to keep dropping as they're over inflated.
george grech
Aug 25th 2011, 17:30
...even yours is dropping, not only others', remember that Mark !!
Peter Aquilina
Aug 25th 2011, 13:12
"Central Bank survey confirms drop in property prices"
To the thousands of counterpart European Union citizens who already purchased thousands of property sites/ apartments/ terraced houses etc. in Malta in the year 2004/2005 PLEASE TAKE NOTE !!
It is now your better time and chance to purchase more !!
But please, leave a few for the locals !!
Vasilisa Brandenburg
Aug 25th 2011, 14:03
it was us locals building property all around and selling them to 'the thousands of counterpart European Union citizens'. It was us locals who were hoping to earn money over night by selling property to 'the thousands of counterpart European Union citizens'. It is us locals who made property balloon go kabooom.
Daz Xuereb
Aug 25th 2011, 15:07
@Vasilisa: I think you'll find that the majority of the development was done by a minority of people (or companies...whose shareholders represent again, a minority)...so blaming the population as a whole is a bit off.
Mr Nick Grech
Aug 25th 2011, 12:58
Waste of time and money!!
Mr Mario Gauci
Aug 25th 2011, 12:42
Property prices may have dropped slightly but the real drop is in the size of the property you now get for your money. Most new properties are looking more and more like rabbit hutches.
Salvinu Buttigieg
Aug 25th 2011, 12:20
Property prices Drop--------Bloody good job too, and it will still drop on a downward trend., cause most had their properties fed to them on a silver spoon passed on by their relatives after death*, but even then unless they know how to make good use of it they are nakkered, the measely wages most earn some cannot afford to buy such properties, but these are the lucky once, but it will not be in time to come as Malta and Gozo will follow the same path as most northern countries and that is capital gain tax and death tax.,don't know what it is in Malta, but its on the cards ,my guess Brussels will see to that., even so i ahte to be an estate agent at this moment in time.
Mr Nick Grech
Aug 25th 2011, 13:14
Dear Mr. Salvinu,
I see nothing wrong in a person leaving his house (property) to his children and for all I know this does not effect the price of property. Besides please note that a person inheriting a property does not need to buy it again!! Maybe you were referring to the upkeeping?
I have never inheritied any property but the taxes you are talking about already exist albeit in my opinion they are unfair especially if a person is just inheiriting his parent's residence.
Mr Charles Cremona
Aug 25th 2011, 11:49
High property prices in Malta were partly the result of foreign buyers especially from the UK and Europe buying in Malta. That pool of buyers has now disappeared since the financial crises took hold and it will be many years before they return if ever, especially when they can get a lot more for their hard earned cash in Spain, Cyprus etc.. In the meantime sellers in Malta can carry on dreaming that their properties will sell for the asking price, well dream on because property prices are only going one way and that is down.
Chris Harris
Aug 25th 2011, 13:25
Precisely, down down and further down to =ground Zero. and this what the first time buyers need.
Bernard Bartolo
Aug 25th 2011, 11:23
Unfortunately what the survey shows, and what is really out on the market seem to differ quite a bit. At the moment I am looking for a property, and it seems that the market is showing consistently increasing prices!!
Mr Charles Cremona
Aug 25th 2011, 12:33
With 70 thousand empty properties you have plenty of choice there are a lot of bargains out there. At present supply far exceeds demand and when that happens prices are heading down not up, I have a sneaky feeling you are trying to talk the market up.
Mr J Caruana
Aug 25th 2011, 11:02
As a qualified financial consultant I've been saying this since I was still at University - This analysis is biased. It is not real. It is based on what people THINK or FEEL that their property is worth and not what it is really worth. Therefore, an increase in the index might be the fact that property owners feel that they MIGHT get away with a higher price (probably they will not). On the other hand, a drop in the index might also be showing that property owners are being more realistic when asking a price for their property when compared to previous years.
If you want a real study, you need to get data from the IRD based on what people are declaring they sold their property in their contract signed by a Notary Public.
Mr W Cassar
Aug 25th 2011, 11:50
Exactly!
Michael Sciortino
Aug 25th 2011, 11:59
No need to get the data from the IRD. Property sales are made by Public Deed and all the CBM has to do is to get contract summaries from the public registry, analyse the contracts and work out prices. That should give a better indication of the price of property.
Maria Galea
Aug 25th 2011, 16:54
If previous studies have always been conducted using advertised prices, changing the source of data would obviously cause a significant fluctuation in the general trend of property prices, which would not be effectively reflecting the truth.
Furthermore, by analysing contracts you still don't have a clear picture of property prices. What you would be effectively analysing is how much the onwer thinks the property is worth and how much the proepective client is willing to pay for it. It's all very subjective.
Alfons Åberg
Aug 25th 2011, 10:46
"The drop was primarily due to lower asking prices..." Asking prices!? If we want to the see the real numbers they should make the same survey on the actual SELL PRICE! Apartments up by x%, well if based on asking price... Oh I could not get €500,000 for my flat last year so this year I ask 550k instead and wops, properties are on the rise again, NOT! Please show us the real numbers if you are to do a proper survey.
Thanks
Mr Anthony Azzopardi
Aug 25th 2011, 10:40
Hopefully the Income Tax Dept will take note for when they send their architects to value properties for tax purposes
j brincat
Aug 25th 2011, 10:26
That's the price of greed!
(jb)
Mr David Galea
Aug 25th 2011, 09:59
The lower the prices the more the possibility that purchases would increase. As anyone might know the property in Malta rocketed up in the 90's. Maybe its time that the average of the property prices should come to their normal range. If I am not mistaken the property in Malta was similar to the property in Germany regarding prices in the eighties. Today the property in Germany remained nearly the same but in Malta it went up by at least 15 times.
It is true that the property negotiators are not happy because their income may be reduced but what the hell they have been getting their pockets filled up to the rim for decades. May be its time for the cunsumer to have a little break.
Charles Micallef
Aug 25th 2011, 09:48
Good news for the newly weds, engadged couples, first time buyers and the consumers in general, may they drop even further!
george grech
Aug 25th 2011, 17:35
yes, even yours!!
Mr Peter Murray
Aug 25th 2011, 09:41
How many properties precisely was included in this survey and if this "research" is the role and function of the defunct Central Bank nowadays why do you need one?
Mr Jo Camm
Aug 25th 2011, 09:59
"defunct Central Bank " How long have you been living in Malta? just returned from the moon??
Mr ADRIAN GRECH
Aug 25th 2011, 10:18
Why is the central bank defunct. Dont you know the real functions of our central bank.
Mr Peter Murray
Aug 25th 2011, 10:26
Gentlemen of knowledge please explain to me,and a great many other people. the purpose,role and function of the Central Bank of Malta-besides that of a reserch agency?
Mr J Tonna
Aug 25th 2011, 10:30
Mr Murray - 'Reserch' is only one of the Central Bank's roles.
Mr ADRIAN GRECH
Aug 25th 2011, 11:30
You seem to be the very wise one!
Joseph Camilleri
Aug 25th 2011, 13:23
Wow! I would have expected the erudite Mr. Murray not to need such as basic and prosaic explanation. Oh dear, oh dear, what a dangerous thing a little knowledge is :)
Mr C Cassar
Aug 25th 2011, 16:08
Mr Murray clearly lost his shirt in the UK property market and then again when Sterling plummeted by 25-20% against the Euro. He missed out on the large gains that were experienced in Malta over the last 15 years.
Malta has a very limited land mass, so (quality) property will always be sought after and these figures back that up. Most new builds are now quality apartments and the fifures show that these bucked the small fall other properties experienced over the last year.
Mr Jo Camm
Aug 25th 2011, 16:39
Yes Mr Camilleri, a little knowledge is a dangerous thing. However more dangerous are those who know nothing and speak/write as if they know everything.
Mr Murray please note.
Mr Charles Cremona
Aug 25th 2011, 18:40
@C Cassar: Most of the estimated 70 thousand empty properties in Malta are newly built, when did you last have a drive around the island ? your argument just doesn't add up, yes there is limited land in Malta but its supply and demand that dictates market prices and at the moment supply far exceeds demand hence the drift down in prices and those that insist that they will not lower prices will not sell, its as simple as that.