With a first foot on the property ladder, how does one continue the climb? Kevin Deguara of RE/MAX Blue Harbour shares his thoughts and advice on the second-time buyers’ market in Malta.
Even with the right guidance, buying a property can be arduous. But as hard as buying a first home may be, it is often not too long before keen investors are looking through listings for their next real estate deal. For those with a sharp eye, the second-time buyers’ market in Malta is full of potential.
“As a second-timer, you’re entering the property-buying process with some experience,” says Kevin Deguara, who has been with RE/MAX since its inception in 2004, and now owns and runs RE/MAX Blue Harbour in Ta’ Xbiex.
He adds that once people have been through the buying and selling procedure, they know what’s involved and feel confident about approaching it the next time.
“Saying that the second-time buyers’ market is vast is an understatement. It includes properties valued between €300,000 and €700,000, so typically, second-time buyers are in a better financial position than they were before,” he continues.
“The reasons for looking for that next property, though, are many. There’ll always be the young couple who previously owned properties separately and are now looking to consolidate as a family unit in a new home together. Or perhaps the family is growing and a larger set-up with outdoor space is needed.
“Some may also be downsizing, such as an older couple whose kids have flown the nest. Rather than their large house, a two-bedroom apartment would suit their present needs more comfortably. And lastly, but importantly in Malta, there are those seeking a rental investment – a buy-to-let property – especially in hotspots in the North Harbour area, including Sliema, St Julian’s, Swieqi, Gżira and Ta’ Xbiex. Here, the buyer may also be looking to upgrade their home to then rent out their first property.”
A second property is often much more fulfilling
But second-time buyers in 2020 have consistently elevated a particular requirement to the top of their priorities.
“We’ve seen a big rise in demand for outdoor space at home,” Deguara says. “Due to COVID-19 lockdown restrictions, people have spent more time indoors and this has been especially challenging for families with young children. Before long, they realised their need for a space in which to enjoy fresh air at home – be it a backyard, garden or roof terrace.
“We’ve also seen that if people disliked their house before, they grew to hate it during the pandemic, which triggered a search for a new residence.”
All in all, however, along with other political and economic issues in the country, the pandemic has somewhat knocked the second-time buyers’ market.
“Even though this segment is not as strong as it was in past years, we are seeing that prices are more negotiable than before,” Deguara says, adding that rather than being unwilling to shift on price, sellers are more receptive to listening to offers and negotiating.
“Just as it’s always been, the process ultimately hinges on the buyer’s budget. Contrary to first-time buyers, second-timers have historically received little by way of governmental fiscal incentives. Recently, however, this changed. The 2020 budget unveiled a stamp duty reduction scheme of up to €3,000 for people who sell their first residential property to buy a new residence. The amount can also reach €5,000 for those with a disability.
“And while banks tend to be cautious about lending during difficult economic times, second-time buyers are generally looked upon more favourably because they’ll have a track record with the bank, capital appreciation on the property that they bought and are now selling, and if they’re not selling, their first property can be used as collateral.”
In his concluding remarks, Deguara shares some advice for those toying with the idea of investing in another property.
“When you’re a first-timer, you’re green. You ask family and friends for their thoughts, and their feedback can be overwhelming. But when you’ve been through the process before, and you’re better off financially with support from governmental and banking initiatives, you’re in a strong position. Importantly, you’ll trust your own judgement more than you might have done the first time. For many, a second property is often a much more fulfilling investment.”
For more information, visit www.remax-malta.com.