The Maltese have believed in investing in ‘brick and mortar’ for centuries and always preferred owning a property to renting one. In fact, according to the Quarter One 2019 Omnibus Survey, the ratio of Maltese homeowners to local renters was approximately 8.6 to one.
However, property ownership isn’t without its challenges and, over the last five years, property prices have increased dramatically, thus affecting their affordability across the locations and demographics of the Maltese islands. Much of this is the result of the major foreign and local rental investments, which created a supply lack in the number of properties available for rent and for sale.
Since then, fears around COVID-19 have halted the real estate industry significantly, shrinking it to just 15 to 20 per cent of its pre-crisis figures and sparking doubts around whether the real estate market will ever return to business as usual. Meanwhile, many are also questioning whether prices will come down during or after the panic. What will be the new status quo?
Running the island’s largest real estate company has given RE/MAX Malta chairman Kevin Buttigieg significant insight into the topic and he stressed that – at this stage – there is no saying what will happen to prices and whether they will go down by five, 10 or even 20 per cent.
“It is even immature to predict that prices will go down to any extent at this stage,” he said.
“I am quite certain that there will be a correction but it is impossible to quantify by how much.”
Buttigieg explained that the market was already seeing a slowdown before COVID-19 hit the country and the industry was experiencing a price correction to shift it from a sellers’ to a buyers’ market.
“Just like with any other crisis, we must now weather the storm and adapt to the markets we are facing,” he added.
RE/MAX Malta closed its doors to the public on March 9 and, since then, has focused on rallying its 400-plus sales and letting associates on a daily basis with dynamic online training.
Topics have so far included: ‘Safety procedures during COVID-19’, ‘Delivering online consultations to buyers and sellers’, ‘How to create video presentations of properties’ and ‘How to deal with challenging times’ as well as a number of other important topics that will assist its staff, agents, brokers and managers to get through the stay-at-home restrictions.
The company has also opened up its international training to the Maltese public, providing them with access to webinars featuring world-renowned trainers such as Tom Ferry, Richard Robbins, Travis Robertson and Jess Peters.
The real estate industry was not one of the sectors considered as a non-essential business and RE/MAX Malta could have kept operating. However, the company felt that it was in the best interest of the families of everyone associated with it to shut its doors and allow its associates to work from home using its state-of-the-art technology.
Our agents are privileged to have access to the most advanced technology on the market and can stay in touch with their clients – whether buyers or sellers – effectively from the comfort of their own homes
“We immediately considered what our people needed most at that time and took the tough decision to close our 35 offices and enable our team to telework. Our agents are privileged to have access to the most advanced technology on the market and can stay in touch with their clients – whether buyers or sellers – effectively from the comfort of their own homes.”
Buttigieg went on to discuss the future of real estate during and after the pandemic, claiming that the industry is facing a new norm in how business will be transacted in the years to come.
“RE/MAX Malta is now gearing up for a new era in the real estate industry in Malta,” he said. “The public will take six, 12 and even 18 months to get past this pandemic and we envisage that a great amount of business will be done through virtual consultations and virtual viewings. Working virtually will allow agents to qualify buyers better before they enter a home.”
Virtual viewings take the form of 360-degree videos or professional-standard video that provide the buyer with the important information they need about a property so that they can decide whether to view it physically or not.
“Pre-COVID-19, some buyers would view 10, 15 or even 30 properties and then learn they couldn’t secure the financing for the one they wanted because they hadn’t done their due diligence,” the chairman continued.
“We are already witnessing a shift in mindset and buyers now want to make a much more concerted effort to get their financial plans in order before they start viewing properties.”
Buttigieg also confirmed that this new norm will be for sales associates to be professionally trained to educate the buyer during the process, as it is already the case in other jurisdictions.
“For instance, estate agents in the US are licensed and still deal with similar obstacles. However, they are far more advanced when it comes to virtual consultations and virtual viewings, and already were well before the pandemic hit.”
The new reality is that estate agents will also need to be more professional and will have to accept that due diligence and professionalism will be major expectations from both the buyers and sellers going forward.
With this in mind, Buttigieg is convinced that, through technology and education, this will be very achievable.
“We are very pleased that licensing in Malta will be introduced in the middle of 2021. This will provide the credibility the industry desperately needs to create vital control measures in terms of best practices across the Maltese islands. Beyond that, further education in technologies such as the ones we have at RE/MAX will play an important role in surviving the market,” he said.
Finally, Buttigieg stressed that the shift in mindset and the use of technologies to deliver a better service will not mean that estate agents ever become extinct. He said that buyers will always want to view their potential property physically, as confirmed during the on-going stay-at-home restrictions.
“Estate agents are needed more today than ever because they are in a position to qualify both the buyer and seller. This crisis has made us realise that the myth of buying property online is a gimmick – people need roofs over their head and they want to view the property they are buying in person. It is high-time estate agents become more professional, so they can deal with this reality more than ever.”
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