A number of real estate agencies have reported a slowdown in business over the last few weeks due to the political uncertainty.

The market this year was already starting to level out, but the political unrest has accelerated the process, said Belair Property managing director Ian Casolani.

He said people were waiting to see where the market was going and holding off their property investments for now. Companies and foreigners were biding their time.

“Some of them won’t be comfortable working in a jurisdiction that is suddenly questionable,” said Mr Casolani.

“Foreign investors are going to wait to see what signal Malta gives out to the rest of the world and whether it’s going to try to regain its credibility.”

Another industry source said December was usually a quiet month anyway, but the last few weeks had been “dead”.

“It’s been a terrible two to three weeks because of this uncertainty. We’ve had promises of sale falling through.”

Companies and foreigners won’t be comfortable working in a jurisdiction that is suddenly questionable

In terms of investment, the source said, foreigners wanted to ensure the country had a serious government.

“It doesn’t make sense for gaming and financial services companies to set up in a country that is corrupt – they need to maintain a clean reputation.”

However, Steve Mercieca, the owner of QuickLets, said it was too early to tell whether the situation was affecting sales. He had seen a marginal drop compared to the same month last year but could not yet tell whether this was linked to recent events.

“The impact of this will probably hit us in a year or two. Obviously, none of this unrest is good for business, it’s putting Malta in a bad light,” he said.

Douglas Salt, one of the directors of Frank Salt, conceded that people were distracted by what was going on and were not in the mindset to look for a house.

However, since there was no imminent election or change in government on the cards, the impact was not massive.

“During the last week, sales have really slowed down but there has been a general slowdown of the market this year and the drop in sales is slight.

“We’d just like to see this all done and dusted because uncertainty is always bad for business whatever the case,” Mr Salt said.

Developers’ association decries ‘greed’

The president of the Malta Developers Association, Sandro Chetcuti, said last week that the industry was going to have to work hard to regain the ‘feel-good’ factor that attracts foreign investment to the island.

In a statement, Mr Chetcuti decried the personal greed that had brought Malta to a situation where it now faced an uphill struggle to regain its reputation.

Together with the real estate agencies, he now hopes to engage in a dialogue with the next prime minister and his team on the way they are to move forward.

The MDA would need to be more vociferous about corruption in the future even when it involves their members, “because if not it will backfire”.

He also sees the need to be more engaged in policy making: “There are certain policies which provide a red carpet, a carte blanche for certain anomalies.”

Excessive bureaucracy too needed to be tackled, because when processes became too complicated or time consuming, “people start to look for shortcuts”.

“If the property sector goes into a recession, this will impact the country heavily across the board,” he warned, adding that the wealth of the Maltese was invested in property.

The political atmosphere needed to change and the upheaval to end.

“Then the hard work begins”, he said, “and we will focus on giving Malta the positive exposure it deserves.”