Everybody loves a good story and none more so than those who spend their money on property. Be they the first-time buyers of a two-bedroomed maisonette or real-estate players, they will usually find themselves forking out stacks of cash and taking out big loans. There’s no getting around the fact that, land grabs aside, the only way to own property is to part with a sizeable chunk of past or future savings.
Which is where the story comes in, because the financial burden can be made to feel lighter if it is somehow grafted on to a bigger picture. That bigger picture is the story of how buying land and buildings invariably leads to profit and great riches. It is to the property business what the tales of El Dorado and Prester John were to European explorers and adventurers.
Take language. The term ‘first-time buyers’ assumes that they will go on to buy a second, and then many more times. It matters not a jot that a young someone who buys a small property might not be remotely interested in a second one (let alone a tenth). However basic their purchase, it sets them up as a first-timer and on to greater things to come. Success comes from trading up as quickly as possible, failure from being satisfied with a first buy for too long.
Besides, ‘buy’ is a vulgar verb to be using here. A more accurate one would be ‘invest’. You never really buy (spend money on) a property; rather, you invest (expect a profit on) in it. By doing so, you also get on, or climb higher up, the ‘property ladder’.
The imagery lends itself because this is thought to be a game in which there are no snakes. There are only ladders and the people who own property are simply somewhere on them and on their way up (exactly where to is a moot point but never mind).
Even if Malta were entirely built up (no longer a far-flung idea that), supply would never match demand
It helps, of course, that it is not just investors whose fortunes grow bigger and bigger. The market itself has no choice but to march on, unstoppably and in one direction alone. That the value of property can and will only go up is one of the fundamentals of the story. Among the things that nourish it are a million examples that prove beyond any doubt that property is the best investment there is. Someone was telling me the other day about an uncle who bought a worthless plot in 1990 and sold it for a million 20 years later. Then there was the story of the grandfather who sold two houses in 1968 and made a tidy profit, except he would have hit a far richer jackpot had he waited another 10 years. And so on.
Whatever their truth value, these sub-plots are not meaningless. On the contrary, they gain in value even as they are constantly circulated – at family weddings, in everyday conversations at work, and so on. They also add up into a fairly triumphalist story of unstoppable and unidirectional growth.
It is also a believable story because it concerns normal and familiar people. So, while This-and-That may not themselves have made a killing selling flats, they will always know So-and-So who knows Such-and-Such who did. This makes El Dorado seem somehow within reach.
The story also draws on other, more formal and higher-profile, sources. As I write, the headlines include a tale of how an investment of €15 million on the St George’s Bay tower will net the Db Group a cool €231 million. Another page tells me that house prices in Malta went up 4.3 per cent in the third quarter of 2017 compared to the previous three months and that the increase was the second highest in the EU. Not a day passes that we are not bombarded with the numbers and hard facts that supposedly underwrite the bigger picture. The slightest mention of a bubble is met with a sneer and six duplexes.
Common sense, too, rushes in to lend a hand. The wisdom that advises us to buy land because they don’t make it anymore seems eminently applicable to flats and maisonettes (and boy do they still make those). It’s a self-evident fact, we’re told, that property can never devalue in a tiny island country where land is finite. Even if Malta were entirely built up (no longer a far-flung idea that), supply would never match demand.
What about liquidity, that perennial risk of property investors? Easily solved, in Malta: buy to rent, and the Italians and Russians and Bulgarians will fall over each other. And, when all else fails, there’s a safety net known as Airbnb. Surely if that Sandro Chetcuti drives a Ferrari, liquidity can’t be terribly an issue.
As an estate agent once told me, ‘property, is property, is property’. Amen.
mafalzon@hotmail.com