Due to the over-supply of properties in the Maltese market, the only way to sell the thousands of new apartments approved by MEPA is to sell them to foreigners, prominent Estate Agent Frank Salt told the Prime Minister during last Wednesday’s Go Today seminar in Capua Palace.
But Prime Minister Lawrence Gonzi is wary of introducing new tax incentives to encourage foreigners to buy properties in Malta as this could increase property prices.
According to Salt, MEPA is issuing far more permits than those needed to cater for the local demand.
“If we keep giving permits when we know that there is not enough demand from locals, the only way to sell them is to get people from abroad to buy them,” the veteran estate agent pointed out.
The Prime Minister acknowledged that government repatriation schemes had the indirect consequence of creating an over-supply of properties.
“We had schemes for people to direct funds invested abroad to Malta but in hindsight I can say that many of these funds went to property. A result of the schemes we introduced led to an over-supply of property.”
Frank Salt also asked the Prime Minister what the government is doing to promote Malta as place where foreigners buy property.
Gonzi acknowledged that past governments had given incentives to foreign buyers. But he excluded introducing further tax incentives.
“I have to pay attention not to put inflationary pressures on property… I would not like to change the system with regards to taxes paid by foreigners, but I am open to suggestions on how to promote Malta in this sector.”
Property – which does not get a mention in Gonzi’s vision for 2015 – is considered by the Prime Minister as a “headache” due to the inconvenience created by dust and cranes to residents.
Yet indirectly, foreign investment in property does creep into his vision.
“When we say that we want to turn Malta in a hub of excellence in IT, we mean that we want to get the big boys in this sector not just to set an office here, but also to settle here.”
During the same seminar the Prime Minister also acknowledged that growth in certain areas could be “so fast” that Malta would have to “get labour from abroad.”
But the Prime Minister insisted that he would never resign himself to this state of affairs, claiming he would prefer utilising Maltese who are not at present part of the economy.
Referring to the low participation of females in the Labour market, the Prime Minister called for co-operation from employers.
“An extra week in maternity leave should not be considered as a cost for the employer,” he added.

jdebono@mediatoday.com.mt