The slowdown in the construction sector and the property market is driving architects out of business, according to the profession, with large architectural firms laying off staff due to lack of work.
We have too many apartments which people do not what
Architects say the matter cannot be blamed solely on the exorbitant fees which the planning authority started charging last year, but they feel this is one of the major reasons they are going out of business.
The fees, which for some developments doubled and tripled, has been compounded by the financial situation and the lack of cash flow, both among developers and contractors.
Sources close to the industry said one major architectural firm recently laid off 12 architects who had been employed when the property and construction sectors were booming.
One architect said the firm where he worked was moving away from simply designing apartments, maisonettes or villas and was turning to renovating vacant properties in an attempt to make them attractive to prospective buyers.
One big market for these properties is those working in the financial sector and the gaming industry who are highly-paid and are willing to invest in property in Malta.
“The problem is that we have too many apartments and other properties which people do not want – so it’s impossible to sell,” he said.
Mr Cassar said a number of permits had been issued but the developers were hanging on to them without going through to the construction phase because of cash flow problems and due to the political situation.
Malta Developers Association chairman Michael Falzon, also an architect, said the cause of the downtrend in the construction industry and the loss of architects’ jobs could not blamed solely on Mepa’s new fees, although he admitted these did exacerbate matters.
When the increases were announced they were meant to make Mepa financially independent, without any need for government help.
“This means the tariffs were not structured according to the actual cost of the service that Mepa gives to deal with applications but were intended to also cover the running of the Environment Directorate when most of its activities had nothing to do with development permits.”
Applicants, he said, were therefore expected not just to pay for the service, but also to pay tax over and above. A spokesman for Mepa defended the new fees, saying the downtrend in the construction industry began before it upped its fees.
“One should note that the trend for applying for development applications for apartments had increased steadily between 2004 and 2007, and then started to decline sharply from 2008 onwards, prior to the revised rates,” he said.