Property boom fuelled by Alfred
Alfred Sants worries that an EU membership for Malta
would catalyse property prices to rise beyond peoples 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 Sants 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
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
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
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."