Frank Salt Real Estate Managing Director Joseph Lupi
speaks to MATTHEW VELLA on the firms performance over the last
12 months and how they are reaching beyond Maltese shores
Frank Salt, one of the leading players in the real estate
sector, has been dealing in the sale and letting of property to foreign
nationals since it was established back in 1969. The recent increase
in interest by foreign nationals has now seen the organisation geared
up to meet this demand.
However the firm has also been active on the local market, by far. That
is the majority of Frank Salts activity, covering all aspects
of this business, dealing with first-time buyers, lower-end buyers and
high-end buyers who look for both residential or commercial activity.
Through their regional network of offices in Malta and Gozo, Frank Salt
can offer a specialised service according to the locality in question.
Joseph Lupi says that competition on the international market is, obviously,
intense. "All you have to do is attend an overseas exhibition to
know how much competition there is," Frank Salts managing
director says. "This is why it is important that we do not outprice
ourselves in the market and we continue to provide a good selection
of property particularly new developments."
EU accession has now borne a new reality on the development of the firm,
and this has been certainly manifest in the firms drive to attract
more interest from foreigners as well as providing their service beyond
"Interest in property by foreign nationals has increase over the
past 12 months. This has resulted in an increase in sales to foreigners.
However, during the same period a number of new developments have come
on the market to meet the increase in demand. Property prices have recently
increased at a higher rate than normal in view of the accession. Unfortunately,
property owners think that foreigners will pay any price. A foreign
client is like any other client and he will buy after having seen other
countries. It is not the first time that a client has viewed a selection
of property in Malta and eventually bought in Spain or Cyprus where
property is cheaper. We have to be very careful that we do not outprice
ourselves. I cannot see property buyers flocking to our shores simply
because we are joining the EU."
Joseph Lupi says that excluding any form of new legislation, in the
long term EU accession will mean substantial overseas investment being
channelled into property: "A higher standard of living and a growing
economy will attract residents and business concerns. This will generate
more demand in sales and letting of residential and commercial property."
Over the last 12 months, Frank Salt intensified its marketing activities
and diversified its marketing strategies to target specific markets.
This year the firm has participated in about eight overseas exhibitions
held in London, Ireland, Switzerland, Germany and Moscow, four of which
are schedule for the coming month.
"In addition, we have strengthened our ties with our overseas associates,"
Joseph Lupi says. "They regularly send their clients over. We have
also employed a marketing executive in London who is regularly sending
journalists over to feature articles on Malta, Gozo and our company.
Some of these are due to come out during the next few weeks. Our plans
include extending our operations overseas with a view to sell property
in other countries. Developers of overseas properties have already approached
us to sell property in London, Cyprus, Tunisia and Portugal."
Joseph Lupi says that the property business in Malta is difficult to
quantify, except for the fact that investment-wise this is the safest
option for everybody. "I have always known the property business
to be very active." In terms of the people it employs, Joseph Lupi
says that when one considers the auxiliary activity the real estate
sector generates, such as aluminium, tiling, sanitary ware, etc, the
number will go into thousands. "In fact contractors always complain
about a shortage of labour and some of them employ foreign workers."
This non-stop activity has seen property prices increase in the region
of eight to ten per cent every year now, considering factors such as
location and property type. "Recently, the rate has gone up to
15 per cent in certain locations," Mr Lupi says. I ask him what
have been the factors which have contributed to this never-ending increase.
"There are a number of factors which contribute to this increase.
Primarily prices are regulated by demand and supply. One of the biggest
contributions to price increase are the high price of land, together
with the increasing costs to build and finish buildings, as well as
delays in the issuing of development permits. All of these factors add
up to a substantial increase in the end product. I do not believe that
foreign buyers really affect the price of property. It is more the wrong
perception of local owners that foreign buyers will pay any price that
affects the prices."
This has in fact been an overwhelming factor in what has been perceived
by some as the artificial boom of recent. EU accession prompted both
the fears of a rush by foreigners into the Maltese property market as
well as a bid to increase prices as confidence amongst buyers increase
following the EU referendum.
The key factor at Frank Salt is however the client, and the companys
own service enables clients of all aspects to have the best service
possible when it comes to the delicate matter of choosing a property:
"Our staff themselves are trained to deal with clients on a very
personalised basis. To us the client comes first. Our staff pass through
a rigorous selection process. We employee well-educated, professional
workers who are capable of representing our company. We make sure we
have a good supply of properties for them to choose from and guide them
through the whole system of buying property. We have one of the biggest
databases of property in Malta and Gozo. People come to us to offer
properties on a regular basis, and we are always on the lookout for
properties. We provide legal and financial information on the matter.
In fact, our excellent relations with Maltese banking allows us to have
special arrangements with banks. For example, banking representatives
actually come to our office to meet our client and tailor-make their
loan for them. We give our clients priority."
Joseph Lupi says that in order to have a healthier market situation
when it comes to the property business, more effective use of land could
aid the sector:
"The market has to be free to regulate itself. However, it is important
to introduce measures which will help to increase the supply of houses
and consequently reduce excessive prices. Local buyers should get used
to living in less space, hence a developer will be able to build two
units in the space of one they are building today. This should reduce
the price considerably. The government should start giving this example
through social housing.
"High-rise extensions wins space, so permits for higher floors
where possible should be favourably considered. Processing of development
permits should be made more expedient as well, whilst incentives should
be given to owners to place on the market their empty dwellings, which
are often an eyesore and are left in a derelict state. However I dont
think that these should be taxed. I assure you that any tax on property
will end up to be the liability of the buyer and will definitively increase
prices. On the other hand, an incentive may be given to the owners of
inherited property to entice them to put that property on the market.
"Government being the owner of large portions of prime land situated
in areas which could be developed. Government should go into partnership
with private developers with a view to develop these sites for commercial
purposes, not social housing. Alternatively, these sites could be transferred
for development such as the ones happening in Tigne, Manoel Island and