Upmarket apartments fuel jump in property prices
Advertised property prices jumped by 6.1% in the fourth quarter of last year compared to the same quarter in 2010, extending the upward trend that began
earlier in the year, the Central Bank said today.
It said that according to its ongoing survey, the increase was primarily driven by higher prices for upmarket apartments.
During 2011 as a whole, the Bank’s index increased at an average rate of 1.3%,
following a rise of 1.1% in 2010.
Although the rise during the quarter was spread across all housing categories, the most significant increases were for apartments and for properties in the “other” category.
Prices of apartments, which made up almost three-fifths of properties in the sample, saw an annual increase of 6.4%, with a higher number of advertised upmarket properties contributing to this rise.
Over the year as a whole, apartment prices were 4.0% higher than in 2010.
During the fourth quarter, asking prices in the “other” category, which consists of townhouses, houses of character and villas, rose by 15.4%, largely as a result of higher asking prices for townhouses and villas.
However, for the year as a whole, prices in the “other” category, which are relatively volatile, dropped by 2.5%. In addition, prices of maisonettes gained 3.6% during the quarter, resulting in a 1.7% increase over the entire year.
On the other hand, asking prices for terraced houses remained unchanged during the quarter, resulting in an overall decline of 0.8% during 2011.
The bank noted, however that the number of advertised properties contracted by 7.0% on a year earlier in the December.
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32 Comments
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Roberta Debono
Jun 27th 2012, 17:15
Its about time the government imposed a tax revenue on ALL these eye soar empty properties all over the islands, its disgusting, look more like the owners are waing for a miracle to happen when the first time buyers and also the outsiders rushing in to buy buy and buy.. DREAM ON BABY. they can sit on an egg but it doesn't mean its going to hatch.
Phil Zammit
Jun 27th 2012, 05:29
Seems like Mr. C. Cassar is the only one with a positive view of real estate in Malta. He sounds knowledgeable, with a valid perspective concerning people with deep pockets. Unfortunately, these are what we call "the 1%" here in the USA. The other "99%" will not be looking at Tigne, Portomaso or any property akin to Tom Cruise's recent property purchase!
It is not comely to ignore the valid cries of the 99%!
So, Sir, when it comes to these 1% (whether local or foreign) you are right on. At the same time, "scarcity of land" - as you so often like to say to justify high prices - is a double edged sword. Malta has scarcity of water. Is that also an asset? How about natural resources, energy, wildlife, beaches, forests, open spaces?!? These are scarce too. Are they "assets" all contributing to exorbitant property prices compared to what one can buy in other countries for the same amount of money?
No one can be in business if not making money - homebuilders are no exception. Yet, the greed infection - particularly in real estate - has contaminated the globe. Malta is not immune to this disease and the 99% see and feel it.
May God bless the prudent and honest seller and buyer of property in Malta.
ANTHONY PAVIA
Jun 26th 2012, 19:33
6 months later the CBM is discussing "advertised prices". With all those CBM employees and others freely available in the public service, why not get 2 to 3 senior clerks to examine all actual contracts for a stated period at the archives? It should not take more than 3 weeks to a month.
J Mizzi
Jun 26th 2012, 18:07
In 2-3 years time, what has happened to Spain will happen to us. The rate that started the Spanish crisis was 1 firt-time-buyer is to 2 vacant properties. The current ratio is 1 is to 5 in Malta (two and a half times that of Spain) with 70,000 vacant households in Malta & Gozo.
The banks in Malta lend money to developers, and lend money to loan-takers to continue this ridiculously vicious cycle which will collapse very soon! At least that's what the EU has been telling Malta for the past 6 months. Considering that a small 1 bedroom apartment (if you can call it that) costs EUR 80,000 at least, first time buyers will stop buying and prolog living with their parents (if possible) this will result in less loans being issued, and less money collected via repayments from developers.
HOW LONG WILL IT TAKE FOR ALL THIS TO COLLAPSE? ..... VERY SOON.
C Cassar
Jun 26th 2012, 18:27
What absolute rubbish. Malta is the most densely populated nation in Europe by a long way. Spain is one of th eleast densely populated. Malta has a huge land deficit which is why prices (of quality) properties will always be relatively much higher. A one bedroom flat for €80,000 is a bargain for many in larger EU countries and it is these people that are buying property in Malta and have been for the last 5-10 years. They understand the shortage of land and shortage of quality properties on the islands.
it's an open market now that Malta is in the EU.
Alan Pace
Jun 26th 2012, 20:10
J Mizzi is correct. C Cassar you are ignoring both demographics and supply and demand.. Malta's birthrate is one of the lowest in the EU (with perhaps the exception of a ceratin section of the population who were not born here and who will not have the wherewithal to buy any time soon). Prices in relation to net income are high and militate against an increased bithrate as young first time buyers are saddled with 40 year mortgages and defer having children. The continuing development is in a spiral to death as the only external individuals who would deign to buy in Malta are individuals who need to hide their cash. A similar bubble is occuring in Central London. Prices need to fall at least 50% to encourage purchasers to shift the huge property overhang. Yet more blocks of flats are still being built. Better quality builds relegate earlier unsold properties down the chain and this will precipitate a crisis. This selling of bithright means the future for Malta and the Maltese language is bleak.
Charles Cremona
Jun 26th 2012, 21:20
C.Cassar: So how do you explain why there is 70 thousand empty properties on this tiny island ? If this is not a disaster waiting to happen I don't know what is especially with the Euro crisis and recession which has now started to be felt here in Malta.
C Cassar
Jun 26th 2012, 22:38
Easy to explain. Most properties that are empty are very poor quality and definitely NOT upmarket. Read the headline of the article, quote:
"Upmarket apartments fuel jump in property prices"
What's so complicated to understand about that? There aren't enough upmarket properties for the many foreign buyers who want to have a base in Malta. That's why upmarket properties are rising fast because there is limited demand of these UPMARKET properties.
Charles Cremona
Jun 27th 2012, 09:46
@ C.Cassar: I was not referering to poor quality properties but the many properties lying empty and unfinished in upmarket areas like the village in Madliena, Tas Sellum, Ta Monita etc.. just have a look at the web sight or better still have a drive around these so called upmarket projects and see the vast number of properties lying empty for years on end, surely the millions it cost to build these properties has to be recovered by the banks at some point.
william cauchi
Jun 26th 2012, 17:49
I have a BMW in perfect condition and am asking €20,000 for it.
Does that mean i will eventually sell it at that price? Some hope. More like € 10,000.
The market reality is so much different than the asking price, but the ''experts'' at Central Bank of Malta think differently.
martin chetcuti
Jun 26th 2012, 19:10
@william cauchi
Your comparison of a BMW with Real Estae is like ''Qiesek qabbilt il Hass mal B*ss.''
Mr Joseph Carmel Chetcuti
Jun 26th 2012, 22:12
William is spot on! What is the point of even talking about advertised prices? So much of Europe's property is going downwards ... except in Malta. Another miracle.
P Mizzi
Jun 26th 2012, 17:17
Tracking the advertised prices of property and calling this "a survey" is a joke. We certainly expect better from the Central Bank of Malta. Why don't they track the prices through the Public Registry where the actual sale price is registered?
Rocco Camilleri
Jun 26th 2012, 16:42
Not what you ask for, but what you are given is the end result. One can see how many buildings are being sold !!!!! if one had to tour around Malta.
j brincat
Jun 26th 2012, 16:33
And the speculators, most of whom became rich overnight, continue to grumble!
(jb)
C Cassar
Jun 26th 2012, 15:34
Quality always sells and the new developments such as Tigne point, Portomaso and a few others etc are great examples of this. These figures support that Malta should plan similar quality developments if it wants to attract high-value residents/visitors to the islands.
W Cassar
Jun 26th 2012, 16:19
Tigne Point quality.. reminds me of a highrise Ghetto!
C Agius
Jun 26th 2012, 17:09
high quality? it looks like a chicken coop, everyone on top of each other !! Not to mention how ugly Tigne point looks from Valletta and the sea.
you're obviously more impressed by the address then the actual property.
Pippo De Marco
Jun 26th 2012, 17:34
Great examples of quality ? - Really ?
There's no accounting for taste, but I wouldn't live in one of those overhyped, overcrowded and overpriced eyesores. No way, not even for free.
C Cassar
Jun 26th 2012, 18:23
Well, it's clear from those who don't have a clue that they don't have a clue. These are the upmarket developments that high net worth indivuals want to buy. That is fact because that is the profile of the residents is such developments. If you read the article, quote:
"primarily driven by higher prices for upmarket apartments.", not low quality apartments as in most of the island, not in terraced houses, not in anything else.
Whether you like it por not, these are the properties that are in demand and always will be because they are in limited supply. You should be happy that weatly individuals invest in such properties because they bring a lot of money to the island that finds it's way to people like yourselves through VAT, local taxes, emploment in th eretail sector etc. It's so embarassing that so many Maltese get jealous of people who are actually helping them. The problem is a poorly educated local population.
C Cassar
Jun 26th 2012, 18:28
there are many from abroad who like these properties, so your opinion is irrelevant in this context.
W Cassar
Jun 26th 2012, 20:44
Im sorry Mr C but you really don't have a clue... many of these properties are vacant!
C Cassar
Jun 26th 2012, 22:39
Tigne Point and Portomaso are fully occupied with a small percentage for sale as you would find in any good developments. So there is your clue or maybe the real clue is some jealousy here that some aren't part of this market.
M Cassar
Jun 26th 2012, 15:33
The Central Bank survey is not worth the paper it is printed on. Everyone knows that sale prices are very different from advertised prices that are often based on wishful thinking. Please.....No more happy talk on the property market. Just ask developers to know how bad the market is.
Mr Simon Camilleri
Jun 26th 2012, 15:13
The advertised price of an apartment means nothing. How about information on the average sale price and the numbers of sales per unit of time as compared to the same time last year and the one before that?
P. Vincenti
Jun 26th 2012, 15:10
These are very misleading figures. It is not correct to draw con luscious based upon the advertised selling price. What one asks it eventually sells a property at are chalk and cheese.
Public registry have the sol figures and this information should be collated and made available annually for a better guide towards price fluctuation.
Steve Sant
Jun 26th 2012, 14:22
You don't have to be a genius to see that people have a choice, and what better choice than an unpsoilt property. After those same people built theirhouse with a garden, now look for another house with a garden, either for further development or to live there for a while. So we are soon going to face Spain's predicament, "who wants those pokey small 1 or 2 bedroom boxes".
joe vella
Jun 26th 2012, 14:01
there is something very strange here
the property developers and the estate agents are complaining against the capital gains tax that has been imposed by the government, they state that this is negatively affecting their sales, they state that sales are diminishing and yet they increase asking prices!
does this make sense? my only conclusion is that most of these people are sitting on a mountain of cash and they expect to increment their take by putting pressure on the government to relax taxation and dues on the transactions
C Agius
Jun 26th 2012, 13:48
Are they selling though?
Ed Grove
Jun 26th 2012, 13:39
Can I suggest that the Central Bank stops wasting it's time on fictional "asking" prices ,and instead,peruse "actual" selling prices?
Mr Kevin Zammit
Jun 26th 2012, 13:33
here we go again with the CBM's joke of a study ... advertised prices!
J Debrincat
Jun 26th 2012, 13:28
All well and good but what about the actual price of properties sold?! and the actual numbers of properties exchanging? Asking prices means absolutely nothing bar inflated expectations.
Please choose the reason of your report below: