The most sought-after type of property, the affordability for first-time buyers and trends in employment are some of the key subjects to be examined in the first-ever survey on the construction industry, which was recently commissioned by the Malta Developers Association.

Apart from giving a snapshot of the current state of the sector, often referred to as a major driver of the Maltese economy, the study will serve as a benchmark for policymakers, entrepreneurs and developers.

Moreover, it aims to establish whether there is a genuine risk of having what economists refer to as a “housing bubble” – whereby demand is driven mostly by speculation and exuberance until there is a sharp drop in prices with serious repercussions on the banking sector.

Launched last week during an event held at the Prime Minister’s Office in Castille, the study will be conducted by auditing firm KPMG and will be spread over a three-year period.  The first findings are expected to be announced in six months’ time, with regular updates during the remaining two-and-a-half years.

Contacted by the Times of Malta, a KPMG spokesman said the research would be carried out through interviews, data from the National Statistics Office, surveys and desk-based research.

“The research will address contribution to the economy, gross value added, trends in full-time employment, yearly investment, the multiplier effect of the construction industry and inter-linkages with other sectors in the economy,” he said.

One of the most crucial aspects of the study will be an analysis of the current stock of vacant properties and the level of accommodation on the market. The aim is to have a clear picture of which sectors are driving the market – being properties for first-time buyers, properties to let or commercial premises – and verify if the current supply is meeting demand. Moreover, the study will consider issues related to the sustainability of the industry itself.

However, the KPMG spokesman pointed out that for the time being, the analysis would not look into the number of vacant properties which are in a good state.

From a financial perspective, the study also aims to throw more light on the exposure of commercial banks in relation to the construction industry by looking at the mix between debt and equity.

Furthermore, the KPMG spokesman said the findings will include a housing affordability index for the various customer segments, including first-time buyers.

At the launch, MDA president Sandro Chetcuti said that the exercise would also serve to highlight any skill deficiencies within the local workforce, such as those of tile layers, electricians, plumbers and construction workers.

“Unfortunately, most of the information available is based on the census carried out in 2011, when the landscape was considerably different. Six years for the construction industry is a very long time,” Mr Chetcuti said.

Developers aim to keep monitoring the sector at regular intervals, in a similar fashion to that which the Malta Hotels and Restaurants Association conducts on a quarterly basis.

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