Prime Minister Joseph Muscat said on Thursday there was no imminent construction industry bubble and that the market was responding well to demand.

Addressing the annual general meeting of the Malta Developers Association (MDA), he also indicated that the government would be insisting on more regulation in the property rental sector.

Dr Muscat said ‘others’ keep harping that there would be a construction bubble burst and that this was going to happen soon.

However, a KPMG study commissioned by the MDA shows this will not be the case. He said the study, authored by Mark Bamber – now one of the partners at Nexia BT – clearly indicated that the building industry would keep developing in the coming years.

“Yes, there may be a time when the industry’s growth will not continue at the same pace but there is surely no bubble which is about to burst as some keep predicting,” Dr Muscat told those present.

Joseph Muscat addressing the MDA meeting. Photo: Mark Zammit Cordina

He also spoke about the need to take action on the rental market. The government had intended to leave the market to regulate itself but this is not happening, he noted.

Dr Muscat said that a White Paper, promised last October in the Budget, would soon be published, which would include proposals to regulate the market.

Dr Muscat said that the government was looking at the notion of ‘predictability’ in which both landlord and client would know  their obligations according to what they had agreed in their contract.

On the Manoel Island project, Dr Muscat said that the developers – MIDI and the Gżira Local Council – will soon sign a ‘guardianship deal’ which will establish rules of how the site should be developed and what access the public will have. However, he did not give any further information.

The MDA meeting was also addressed by PN leader Adrian Delia who emphasised the need for a long-term plan in the sector to make sure that the country’s economy would grow in a sustainable manner.

Sandro Chetcuti, the MDA president, said the construction industry had kept growing at a fast rate during the past year.

“The MDA will continue to move forward and perform as a policy driven organisation,” Mr Chetcuti told the meeting.