19 MARCH 2003

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Property boom fuelled by Alfred Sant’s statements

Alfred Sant’s worries that an EU membership for Malta would catalyse property prices to rise beyond people’s reach seem to have boomeranged, with prices rising beyond the normal expectations of seven per cent a year.
The property market at the moment is experiencing both a price hike and a sales boom and the irony is that Sant’s statements may have actually encouraged property owners to push prices up.
Dr Sant is worried that couples looking to buy homes will face prices they cannot afford and those looking to buy property will not find any consolation in the fact that some property owners have already put their prices up by anything between 11 and 15 percent, according to one estate agent.
Although prices have risen, the property market has experienced a mini boom with many buyers expecting prices to rise further still, should Malta become an EU member.
According to estate agents, the higher prices and increased sales have also been due to the millions of Liri brought back to Malta as part of the investment registration scheme in the past year, as well as the poor performance of stock markets. Up-market properties especially have been swept up, noticeably in the Manoel Island/Tigne project.
Francis T. Spiteri Paris of Perry Ltd told The Malta Financial and Business Times: "Prices have been rising steadily since 1986 with the advent of a Nationalist Government. The main contributor to this has been the fact that the population has become more affluent.
"Sales of property have increased dramatically in the past year or so."
Spiteri Paris does not believe that price increases are solely due to expectations over the EU and cites: "The repatriation of external funds to the tune of Lm290 million, the fall in interest rates, the collapse of the stock market and the fact that investors are buying property as a hedge against inflation, may all have affected the market positively.
Bernard Bugeja of Bernards Real Estate told The Malta Financial and Business Times: "It is a fact that property prices increase between seven per cent and nine per cent annually. However, prices have increased over the last 12 months by more than the normal seven per cent. Possibly even 11 per cent or 15 per cent in the lower to middle end of the market and 20 per cent at the higher end.
"Possible European Union membership has created an artificial hype among property owners, causing them to either hold onto their properties for a while longer or to request exorbitant prices almost too unrealistic for purchasers to meet."

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Business Times, Newsworks Ltd, 2 Cali House, Vjal ir-Rihan, San Gwann SGN 02, Malta
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