INTERVIEW | Janice Azzopardi: Property intermediaries ... not salesmen

Real estate intermediary Janice Azzopardi has been involved in the construction, development and real estate sector for 20 years, having started from the basics and worked her way up. Passionate about guiding her clients, charging them only a fair fee, and safeguarding their interests, she started her own brokerage firm, Sensara Malta, five years ago

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Sensara Malta bills itself as a traditional “1%” broker. What does your business involve?

I started Sensara Malta five years ago, and we have 20 people working for us now. We operate as intermediaries when it comes to buying, selling and renting property. Sensara Malta prides itself that it strictly abides by the law which stipulates that you can only demand a 1% commission fee from a client. Although there were efforts recently to push this up to 5%, we opposed this and will continue to operate according to the law.

We provide free valuations and don’t oblige anyone to sell through us when we value their property. It is their property, and we don’t ask anyone to sign a contract after valuing it – we leave them free to decide what to do with it, because, after all, their property is their life’s investment. We only get our 1% commission fee if they choose to sell it through us.

We also are involved in the rent market.  I personally don’t like the idea of renting, but we do it to satisfy our clients’ requests. As is the law, we get half the rent commission fee from the tenant and half from the landlord. But we don’t charge another commission fee for clients who renew their rent contract.

How did you get into the property sector?

I worked for many years with a construction company, and I started right from the very basics when it comes to the sector. Eventually I entered the sales aspect of the sector and started to realise that people were being robbed in some cases by being charged a 5% commission fee. I also felt that charges in general were being pushed up at an exaggerated rate.

So, as time went by, I decided I would start my own venture in this industry, so I established a professional business for freelance intermediaries, or sensara.

Sensara Malta’s slogan is “keep it affordable and in its realistic market value”. In a market reality where property prices are on the rise – and where young people are facing it difficult to afford to buy or rent their first property – how do you manage to do this?

From the outset, I decided that I didn’t want to employ people who had worked with other estate agencies – I wanted staff who were new, with a view towards training them to be proper sensara, not sales people.

Many estate agencies employ what are basically salespersons – it’s all about making money – but, with Sensara Malta, we care about safeguarding our clients’ interests. And we do this mainly by giving correct valuations, not binding them to us, and safeguarding them from entering into risky promise of sale agreements (konvenji).

From our end, we do not exaggerate in our commission fee, but I cannot dictate to a property owner what price they will sell or rent their property.

What makes Sensara Malta stand out against the competition?

Sensara Malta is not there to compete. We exist to give our customers a different kind of service than that of other estate agents. I founded my company because I was hurt with the way people saw intermediaries – as people only out to make money – and they didn’t realise how much we safeguard them.

The general public viewed estate agents as money suckers. I don’t want money suckers working for me, and I want our clients to turn to us because they know we will help them. I was out to build trust, and people now know Sensara Malta safeguards them. And we are proud of our careers as sensara.

What do you think is behind this huge boom in the property market?

The property market really opened up in 2013, when there was a change of government.

Starting from that year, there was a rise in people taking out buy-to-let loans from the banks, and paying back the loan from the income they received through renting out the property they bought using the loan.

Developers weren’t too happy with this, so they increased their prices, eventually leading to very high prices for properties.

In turn, land owners started raising the prices for land, construction companies started charging more to build, those who supply things like aluminum fittings and tiles pushes their prices higher, and so on. It’s a chain – everything started increasing.

One has to acknowledge that developers had little choice but to also continue to increase their prices due to this.

What are your most popular property types, and are some localities more popular than others?

The type of property depends on people’s budgets, of course. But, if, for instance, you take your typical new block of flats, the first to go would be the maisonette, if there is one, and the penthouse. If a maisonette or penthouse comes back on the market, it’s always a resale at a higher price.

Of course, most people want to own a house, but often their budgets don’t suffice, so they go for a maisonette or penthouse, and if they can’t afford this, they opt for a flat. In terms of localities, we are involved in the sale of properties all over Malta.

One area which is rapidly increasing in popularity is Gozo, however, and rent prices for flats are already increasing there, even before the tunnel permanently linking the island to Malta has started being built.

What is your stand on rent control? Do you think there should be some intervention to prevent prices from increasing beyond certain limits?

I participated heavily in the drawing up of the government’s White paper on rent, and even debated [Malta Developers’ Association boss] Sandro Chetcuti on Xarabank on the matter. The social aspect of the property market is very important for me.

In terms of the government’s role in this, the rent subsidy it offers has been increased, but I don’t think this is the solution. The government cannot control the private sector.

So what can be done to prevent property prices from continuing to spiral upwards?

Keep in mind that all economic progress has its aspects of regress. However, I believe that all the talk about how the influx of foreigners is causing property costs to rise is actually leading property owners to keep pushing their prices up.

What I think has to be done is for the developers and everyone else involved to stay calm and recognise that, if things keep going in this direction – ever climbing prices – the whole sector will freeze.

What is worrying me is that if the market keeps heading in this direction – meaning that land prices keep rising and the developers and all others connected to the industry keep pushing them up too – we’ll end up in a situation where the market freezes. And I see this freeze happening in the next four years.

Maltese people are struggling to buy a property. Today, a single person with a €25,000 annual salary struggles to purchase their own place to live. A one bedroom apartment in the south of the island costs around €150,000.

Due to this of this, I am seeing cases where people enter into relationships of convenience. Single people come before me and complain that the bank would only give them a maximum home loan of €80,000, which isn’t enough to buy a property, so they feel it would make more sense if they were in a relationship with someone to get a loan as a couple. Six months later, I’d see the same person coming over with someone else, as a couple. But is this the solution? No.

If people are getting into relationships of convenience to prevent paying rent and to get a loan, because they have no choice in this current climate, in a few years’ time, this is going to cause an even bigger problem in the country.

So, what I am saying is: prices cannot keep rising. Maltese people have to remain homeowners in their majority, or else they are going to end up at the mercy of capitalists who determine the price of property. This will end up being a worse problem for the government, because more people will be in situations of poverty or where they require social housing.

In the past, social housing was meant for those who didn’t manage their money wisely. Now the situation has changed… People who need social housing today include those who are in employment, and while they might have limited incomes, they are not irresponsible people or spendthrifts. The reality here is changing.

Do you believe we are on the road to a “bubble to bust” situation?

If we are not careful, and Maltese people become no longer able to afford to own their own home, then we will have problems. And this isn’t something that depends on the government. It is everyone involved – landowners, property owners, developers and all others in the sector – who have a role to play to improve the outcome of this situation.

Is it true that the prices of flats is now reaching a plateau, because there are many flats on the market, while the price of a townhouse will keep rising, because they are becoming rarer?

Owning a flat is now commonplace, while ownership of a townhouse is now indeed becoming rare. Someone who owns a townhouse and a piece of land nowadays is rich without even knowing it.

An average-sized plot of land in the south is worth around €400,000 today. One acre of land, which contains approximately four plots, is worth around €2 million, depending on the locality.

In central Malta, a 1,200 sq.m piece of land is worth €5,000,000.

As an aside, this gives you an idea what the developer has to pay for land. So the blame can’t be placed solely on the developer for the rising prices. Developers are buying land at exaggerated prices, making it difficult for them to reduce their own prices.

In terms of a plateau in flat prices in particular, I personally am not seeing this happening at the moment. But, I acknowledge that from last January, I have seen the property market prices in general somewhat stabilise.

The years 2015 to 2018 saw prices rise practically every month. Developers would call me from one month to the other saying that a particular property had risen in cost by €10,000 or €20,000.

As from the start of 2019, I feel that prices have “calmed down”, so to speak, but they still remain very high.

Currently, a large finished three-bedroom apartment in the south would be sold for about €240,000, while in the central area it would go for €350,000. There are places in Għarghur where a 145 sq.m flat, with no views whatsoever, would cost €420,000.

What would you say is the most important thing if you want to be successful in this sector?

Being successful in this job demands a lot of hard work. It’s one of the toughest careers, because, while in other types of business, you would buy a product and then sell it, in our line, we have to find a property, which would not belong to us, and we’d them have to find clients to buy it.

To be a real intermediary in this sector, it takes at least five years. Until you’ve been in it for five years, you’re basically still a trainee.

There is a lot of hard work and long, long hours – in winter, forget the weekends, because most of the viewings are held on Saturday and Sunday mornings.

You also have to always be honest and carry out a thorough inspection of the property which you are going to sell. You have to know everything about that property – its vendor has to be asked if they hired an architect, or if they’ve carried out public registry searches in the case of inherited property to find out how and why the property was passed down, and so on. I don’t want to have a client sign a promise of sale agreement, only for him to have to carry out €5,000 worth of public registry searches, and then ends up not even being able to acquire the property when the search fails to confirm the family history behind the property’s inheritance.

This is the difference between being a salesperson and being a proper broker or intermediary.

In this regard, I believe we need to train brokers through the setting up of specific courses at MCAST. We are dealing with the biggest investment people will carry out in their lifetime, and an untrained salesperson can end up misleading someone.

One may argue that people go to notaries if they want advice before selling or buying a property, but, in reality, they many times come to us first, and it is us who eventually advise them to visit a notary, especially about matters of taxation.

Therefore I am pushing for a school within MCAST to train people, at different levels, in the career of a broker. Then, depending on the level of qualification acquired, that person would be able to practice as a broker, assuming duties up to that level, just as it works for other professions. And the profession of estate agents and of sensara should require a license to practise.

I would also insist that people who can’t speak both Maltese and English aren’t allowed to obtain such a license. We have many foreigners in real estate in Malta who can’t speak the languages of the country properly.

It’s also unfair that bank contracts for properties are drawn up solely in English. It is true that English, like Maltese, is an official language of Malta, but certain people, especially the elderly, might not understand technical English, and end up signing a contract without understanding the clauses. So I think there should be changes in this regard.

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