Property has always been a hot topic for us Maltese. It is a subject that always grabs attention, is a definite source of conversation and ice-breaker, fuels debates and brings out love or hate emotions.
It has been the source of feuds in families, riches in others. Property is probably the average person’s largest single investment in their lifetime.
Why does it have such a pivotal place in our society? Perhaps it is our small size and land mass that makes it such an attractive asset to own. Perhaps our past history has led to people preferring to, as crudely translated from our mother tongue, “put their money where they can step on it”.
So why, with so many people buying and selling property on an annual basis, is information on the market so hard to come by? Information, where it exists, is scattered between a few agencies, ours being one of them, that collate data. Banks, the Ministry of Finance, the Inland Revenue, the National Statistics Office, the Central Bank and some accountancy firms and architects, among others, have sources of their own.
Take a property price index as an example. The Central Bank has one based on advertised prices, the NSO has one based on contract prices, finance gathers information through a special form given to the notary on contract, some architects for whom valuations are their baby have built up pretty good indexes, some agencies like ours have their own, as well as some consultancy firms.
Ridiculous isn’t it? Each body duplicating research and information. With so much of the nation’s wealth in property it would be far better if efforts were combined for a decent, all-informative index. Of course, Joe Public doesn’t even know where to start from. As for foreign investors, ever increasing in number, the scattered and basic detail available in the main indexes is what they can only consider to be a minefield.
As for companies undertaking projects, it lacks the detail required to make informed decisions. There is generalised grouping of districts as opposed to grouping by town at the very least. Rental is even worse. There is absolutely no data, outside some agencies like ours, on average rates, stock, average stock size, etc. The NSO gathers some information from agencies but it is hardly comprehensive.
Why, with so many people buying and selling property on an annual basis, is information on the market so hard to come by?
If we turn to the supply side of available property, the situation is much the same.
The last Census was in 2011. Here it was stated that there were 72,150 vacant properties. Superficially, a real shocker. But if one were to analyse the figures properly, 30,000 of these were for seasonal use (villeġġaturi). That leaves 42,000. Of these remaining, 59 per cent were in a good state of repair or in shell form. The rest were dilapidated or in need of repair.
Effectively available for possible sale there were circa 17,000 properties. In this period the market was sluggish and applications for new development had dropped significantly. But this was in 2011. Since then, there has been a new boom in property demand, with most of these sold to home owners or for rental investments.
Sales increased from close to 9,000 annually to over 16,000, with the construction industry taking a while to start redeveloping. At the time, the areas with most vacant properties were the three cities – Sliema, St Julian’s and Valletta, surely not the case today. Most of the property today, we know as agents, is in fact being sold on plan, but wouldn’t it be healthier for a running total statistic to be kept available for informed decisions?
The planning authority knows how many permits it is processing but we really need number, type and size of units, in which area and location, to best ensure supply is meeting demand or for demand to be shifted to locations where there is more supply.
The demand side is replete with historical data. Usually through a parliamentary question we find number and value of contracts for a given year. But contracts are historical data, representing deals finalised a time ago. All promises of sale must now be registered with the Inland Revenue. What would be really useful would be if the number, value and locations were released in as detailed a format as possible. The information is there, it is just not being captured effectively and put into the public domain.
The size and extent of the foreign market is another statistic not easily available. We need to know the number, nationality, type and size of property these buyers favour in order to market effectively. Large developments representing a huge financial outlay also need to know all this to better plan their projects. As an agency we are well placed to advise accordingly but would be better placed if much more information were available.
With so much money at stake we need to move away from back-of-the-envelope calculations, to ones backed up by detailed, comprehensive information.
Douglas Salt is a director of Frank Salt Real Estate Ltd.
CommentsComments powered by Disqus
Do not have an account?Sign Up