Press Room
Clear skies predicted for property market by FEA
“Property prices vary according to location, however property prices seem to have stabilized in the last few months mainly due to the many changes the Island is going through. I would say it is also due to the negativity that certain media is putting forward.”
The ‘negativity’ mentioned by Joseph Sullivan, who is in charge of the Federation of Estate Agents’ Legal and Judicial Matters and director of SQL Real Estate Services, could be as a result of media reporting a property crisis which estate agents and notaries cannot agree upon. The question of whether property prices and sales have stabilised, increased or decreased still lingers. Trafford Busuttil, President of the FEA and managing director of Propertyline Malta, said, “What I believe is happening to cause this so-called crisis is that everyone seems to comment on the property market without having the necessary knowledge. Here we are faced with a conflicting situation. A report commissioned by the Church is stating that sales have increased dramatically and now we have the flip side of the coin were a section of the press is telling us that we are faced with a crisis. “If prices have increased dramatically there must be a market to sustain it. Then what crisis are we talking about? The market is healthy and will remain healthy, as demand is ever present, I suggest that we do not try and spell a scenario of doom when this is not the case.”
The FEA felt that this crisis is not correct, since many Agents have had a good year and sales have not dropped. Trends may have changed due to various changes Malta is going through, although they strongly believe that sales will continue to increase.
Not all notaries will agree on the situation since they handle different forms of contracts. According to some notaries, contracts are still being handled in the usual fashion and the number of which have stabilised. Property is still being sold normally however the crisis may be referring to average valued property being priced higher than the actual value. Property, which costs more than average but is worth the amount, is still being sold.
Sullivan said, “It has been mentioned in various newspaper articles that first time buyers are finding it very hard to purchase there first property, however the FEA believe that first time buyers need to look further in to the options available in various locations and not only the prime locations where property prices are naturally higher.”
There are many properties at very affordable prices on the market according to Sullivan, and first time buyers should simply identify their essential requirements and look in various locations.
According to Busuttil, property sales during the first and second quarter of the year were very much on a par to last year. “However, during the third quarter the market was slightly, and I would like to repeat slightly, quieter, due to certain articles that appeared in the local press, the increase in rates of interest and a general election on the horizon. “This is very normal under the circumstances but I definitely cannot picture the current situation as a crisis. On the contrary we are looking at a very bright future, especially due to a number of exciting projects on the drawing board, Malta’s entry into the Euro and the demand from the overseas market.” Ron Chetcuti, manager of Aquarama Group of RC Real Estate feels that sales have decreased, however there has been an increase in projects.
"The problem lies with financing. People, say, would go for a property priced Lm50, 000 or less, but would not be interested or manage to purchase a property priced over that amount. If property was advertised properly, there would be more interest.” Chetcuti also mentioned the lack of quality property available to purchasers, however said that there is a big supply of property. “Prices have not stabilised and depend on the sellers. If equity were made available, by or to banks, there would be more property sales. Sales are usually made, either through the banks or overseas investments.” Sullivan agrees with Chetcuti that projects are increasing to match the demand, but when asked if property prices reflect property value felt nothing has changed over the years. “Firstly it is the market that will determine any property price, however once again property prices depends mainly on location, therefore over priced properties in certain locations has always been the case and it is the market that will eventually set the price.” Manager of Fairdeal Properties, James Mangion said, “In my opinion the rate of property sale is stabilised. Property prices are stabilised and also prices are being reduced to the present market value.” Kenneth Debattista, manager of LLMA, on the other hand felt that the number of sales has decreased due to more property being put up for sale. “Property prices have increased somewhat due to price of the land and the material being used which constantly increase in price.”
http://www.businesstoday.com.mt/2007/10/10/t3.html