Chris Grech, the chief executive officer of Dhalia, has decades of experience in the real estate sector. He told Vanessa Macdonald that, while he sees very positive policy direction being given by this government, a concerted marketing drive is needed.

The number of permits issued has gone down from a peak of 11,700 to around 3,000 last year. Is this the end of the construction industry?

Until a couple of years ago, there was no confidence in the development and construction sector. But this government changed that. I don’t want to be political but the present administration voiced out loud that it wants to revive these sectors and to fine tune the present products on the market, such as the residency schemes.

There are now five schemes, ranging from the Global Residence Programme to the Individual Investor Programme, and all of these have been made more marketable.

The government made it clear it wants more foreign investment, more people to come from all over the world to set up more businesses here.

They want people to come and create jobs, to retire here, to buy passports and to buy or rent properties. These investors spend money in diverse sectors of the economy.

In the past year and a half, we have also seen the government taking the initiative on government projects like Dock One, where there is considerable room for entertainment, residential and mixed use development. They are looking at more marinas and more hotels, for example.

But it does not happen overnight. It takes years to build up. And you have to make sure that the projects are financially feasible.

There should be a lot of study and research before these projects are implemented.

It is pointless if the construction industry makes the same mistakes it did before, adding unsellable apartments to an already excessive supply... Have they learned their lesson?

We are still dealing with the ‘old’ product at the moment. We are still at this stage where the excess supply accumulated until two years ago is being sold.

At what price though? Given the excess supply, did they have to slash their prices?

Not as much as you might think. There has been a huge increase in demand in the past one and a half years for a variety of reasons.

Take first-time buyers: 2014 has been an exceptional year for them. They save €5,000-€6,000 on stamp duty if they buy by the end of this year – so many couples planning to marry decided to bring forward their purchase plans. This has had a big impact of the developers’ cash flow. And it was also an incentive for single people looking to move out of the family home who decided to buy instead of rent.

Apart from first-time buyers, there are also all the foreign companies that set up in Malta who need offices and whose employees require places to live...

And in turn the demand for rental properties created a new market for the small investor who buys a property with rental in mind.

The situation has stabilised and prices have stabilised.

A holistic concerted marketing drive is needed for Malta’s real estate sector. Photo: Darrin Zammit LupiA holistic concerted marketing drive is needed for Malta’s real estate sector. Photo: Darrin Zammit Lupi

What will the developer do with that cashflow? There were so many dilettantes who only became involved with con­struction when the boom was under way...

Developers have learned from the experience of the past 10 years. It would be commercial suicide to invest in a piece of land because it is cheap, or to build a product which is not of good quality and design. That era is behind us. I am very confident that developers will adopt a more professional approach.

And there will be much more emphasis on design – which is costly per se and costly because it imposes higher standard materials and details, for example. Without them the property will not sell because the buyers have become a lot more demanding.

We are seeing a lot of projects coming up. Mistra has a permit for around 700 units. There is also the marina in Gozo being proposed which can help the island – and I would hope that there might be a few more good hotels there.

A marina and hundreds of apartments are planned where the Jerma hotel was and there is a proposal for land reclamation on which hotels, residences and marinas could be built. There is also the Savoy Hotel at the top of Rue d’Argens and of course White Rocks.

These are projects rather than random apartments on random streets. Is this what the market needs?

I wish I had the answer – but without research, you cannot say for certain. Small projects, redevelopment and infill projects will continue. You will always find developers ready to pull down a few houses in Swieqi and build apartments there, and those who get their hands on a piece of land in the middle of a village which is still being farmed. There are a lot of good locations but it depends on how well they fit into the context.

Isn’t that why projects may make more sense? They are built with a much more holistic approach...

Yes, they look at utilities, parking, waste, transport. But there are ways to resolve these issues.

What I do not agree with is the way we are ignoring the opportunity to ensure that the Maltese islands prosper... We have a unique product but our competitors in the Med also have very good products with much better conditions than we offer.

We have a unique product but our competitors in the Med also have very good products with much better conditions than we offer

We need to approach the market and come up with a really incredible marketing strategy and worldwide awareness campaign. It will need a very high budget. If we are committed to all these projects, we have to brand ourselves.

How? We need to bring all the entities involved – from the banks, to the developers, real estate agents, Malta Enterprise, Malta Tourism Authority, FinanceMalta – and of course the government on board and work as one team. This is what other countries have done.

I have voiced this opinion many times over and my major concern is that we are not laying the right foundation and we are underestimating the power of selling our lifestyle and the incomparable Maltese experience.

To achieve this, we need a very professional structure in place with a powerful team of around 12 people to run it, corporate people, who are paid well, who take ownership of it and who are willing to travel the world with it, who can walk into a boardroom and present Malta with passion.

We are talking about hundreds of millions being invested in these projects – but we will not spend a few million to ensure that we do not make very expensive mistakes and that these projects are a success, whether this success comes from Japan, South Africa, Russia, America or EU member states. I went to Prime Minister Joseph Muscat after he was elected and I mentioned this to him but I stopped after a few minutes as we were clearly not on the same wavelength.

Now, the government seems to have a vision for the construction industry and it needs to get it right.

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