“It can work both ways,” was Labour Leader Alfred Sant’s reply to MaltaToday’s question on whether his party’s proposal to give subsidies to first-time buyers of private residences might push prices even higher up.
Speaking at a press conference outside the Housing Authority’s offices in Floriana, Sant reiterated his party’s pledge to give first-time buyers a subsidy on interests that would not exceed 4.5% annually and to give grants of 10% of the property prices to young couples and those owning unique residences.
According to Labour’s proposals, first-time buyers of property costing not more than €116,500 (Lm50,000) will benefit from new schemes that would also safeguard debtors who lose their job by imposing a moratorium on the payback of their loan and interests.
Sant said those benefiting from these measures will be saving up to €15,500 (Lm6,600), but when asked about the possibility that real estate agents might be tempted to raise property prices the Labour leader admitted this was a possibility.
“Yes, it is possible, but then there are also others selling property who haven’t managed to get the price they’ve set, who could lower their prices in reaction to this policy,” Sant said. “So it can work both ways.”
Sant also did not rule out building social housing units outside the zones of development but said the first priority would be building in areas that were earmarked for development.
“One should never say never,” Sant said when asked about building ODZ social housing. “But of course one has to go for the developable land first and discard proposals on arable land. Besides we have a clear policy to safeguard our natural and environmental heritage.”
Sant quoted studies from the Cana Movement and the Curia’s commission on peace and justice to highlight the plight of property buyers who end up repaying their loans for 35 years, with some €4,600 (Lm2,000) to €7,400 (Lm3,200) annually.
Quoting a Central Bank study held in 2006, Sant said the cost of an apartment rose from €26,800 (Lm11,500) to €121,000 (Lm52,000) in 20 years – a rise of 350%.
Likewise, the price of a fully finished maisonette rose by 350%, from €29,600 (Lm 12,700) to €133,000 (Lm57,000).
In the last 10 years, bank loans on the buying of property increased by 300%.
Asked whether he would reopen the divorce debate, Sant said he would wait for the issue to gain momentum through calls from civil society.