Property market buoyant, real estate veteran insists
Raphael Vassallo
Frank Salt, one of Malta’s most successful and established estate agents, insists that contrary to alarmist predictions of an impending market crash, the local property market is actually doing well, thank you very much.
“We are very happy with the way things are going,” an upbeat Salt told MaltaToday this week. “The property market is very active at the moment, mostly centred around the first and second time buyer. All in all, the number of sales in the lower end of the market has gone up in recent months. People are buying for lower prices, true... in fact you could argue that previous prices were inflated, and that the revised prices today are what they should really have been a few years ago.” Salt adds that local banks have also helped along, by providing affordable mortgage rates and attractive bridging loans.
“First-time buyers, including young married couples, are taking advantage of the favourable conditions offered by local banks... and why on earth not?”
However, Frank Salt does acknowledge that not all segments of the market are faring equally well. The bottom line appears to be that “quality properties” are selling, while inferior quality appears to be stuck in a rut.
“It is the good properties that are selling,” he explains simply. “Substandard properties are not moving at all. The owners of these properties have to take stock of the situation and wake up to reality: they must either reduce their asking price, or improve the quality of their product. Either way, it is good news for the market itself...”
In a nutshell, Frank Salt argues that Malta was until recently living under something of a delusion that the local property market was somehow immune to market forces, and would carry on moving in the same direction indefinitely.
“It’s only now that people appear to be finally realising that it was not ‘God’s gift’ that property prices would just keep going up and up and up,” he says. “Something had to happen, and it seems that finally reality is taking hold, and prices are being adjusted accordingly.”
On another level, estate agents also report that the foreign buyer market is picking up: a development which tends to affect the upper end of the spectrum far more than the lower.
“We have seen a considerable increase in the number of foreigners looking to buy property in Malta, he confirms, adding that this is one area where government can help in its forthcoming budget with specific measures aimed at encouraging this sort of business.
“I am not suggesting that government should assist developers,” he quickly points out. “After all, these are people who have made their assessments and taken their own risks, and don’t need any assistance in that sense. But government can fo a lot to assist the type of person who is likely to buy these properties... and by ‘assist’, I mean simply make life a little easier for them...”
Salt gives as an example a foreign potential buyer who has to wait five years to get his residence permit in Malta, and who is burdened with undue bureaucracy.
“Let’s imagine a Canadian national, currently residing in Sweden, decides to buy a property in Malta. In the present set-up, he would have to go all the way back to Canada to meet the Maltese High Commissioner first. Why? Why make it so difficult for him, when what he is planning to do will also benefit the local economy?”
Turning his attention to next month’s budget, Frank Salt makes a few suggestions that would, in his view, help the local property market find its feet.
“Most important of all is to get rid of the 12% tax on property sales,” he points out, echoing concerns such as those expressed by the GRTU’s Vince Farrugia (see page 8). “It was an unfair thing to do in the first place – it’s true that in recent years there was a high increase in sale price of a certain type of property; but it was by no means all properties that were selling. Besides the way the tax was introduced did not discriminate between properties sold at a profit, and those sold at a loss, which makes a mockery of the whole idea of tax to begin with. As a result, some people found that they had to pay 12% even if they sold at a loss. That is unfair...”
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Salt adds that local banks have also helped along, by providing affordable mortgage rates and attractive bridging loans.
