In this issue the MDA President Sandro Chetcuti shares with us a number of endeavours the Malta Developers Association is working on while striving to improve the development industry in Malta and its surrounding elements.
by Sandro Chetcuti, President of the Malta Developers Association
The first issue that I want to bring up is that the MDA is working hard to get the Malta Property Foundation off the ground so that we can all benefit further from foreign investment in these Islands. We were quite satisfied with our successful participation in the Dubai Cityscape exhibition – and from the support received from the State including the presence of the President of the Republic herself – from which we have noted certain positive developments and openings for potential future collaboration. This participation brought us into contact with top Dubai personalities including the Dubai Sheik himself and the Prince of Abu Dhabi with whom we had positive talks about possibilities and options for the local market.
At the same time the MDA is concentrating its efforts on the forthcoming White Paper on rental reform in which we are insisting that we have to be careful to avoid creating issues for those who are already investing in the market while also ensuring that there is an adequate supply of affordable dwellings that can be aimed at people with needs, such as separated persons. On this we have obviously given a number of documented proposals in which we also underlined the need for incentives directly aimed at property owners who are interested in renting their properties for this scope and to help them target the market effectively.
One of our more interesting proposals concerns those who buy property in Malta to live in; if after a number of years they decide to sell it, they would not be taxed for any capital gains that may have accrued. We are proposing to the Government that anyone who has any property to rent to reach the scope of affordable units should also benefit from the scheme for ordinary residence and in the long run, he/she would benefit too from the scheme, as a direct result of their participation. This would be a great incentive for property owners who wish to support the Government’s scheme but who need more tangible benefits than the Government has so far offered. The Government should do its utmost to find viable solution to the issues, while in so doing, also encouraging owners to contribute by offering suitable incentives. One way forward that we see is that the Government could use its own lands to offer partnerships to the private sector, or create a foundation, to further make this scheme work to ensure that there is affordable property on the market. What is sure is that the State needs to think carefully of incentives that will facilitate affordable residences for the less affluent of society, and it needs to come up with concrete proposals to generate an adequate supply of affordable housing.
We note with much satisfaction that the Government has indeed initiated measures in the last Budget through which it is giving substantial subsidies to those who are really not coping with their current situation. This subsidy has more than doubled and is now capped at Eur5,000. There is also the option of the Government giving official support to those over 40 years of age, who might be going through difficult or tough times (perhaps following a separation).
REGENERATING OUR ISLANDS
The MDA believes that there is still more that we can actually do. One of our challenges that we foresee and on which we are presently working is the regeneration of areas which have become somewhat downtrodden. This,in fact, is not an easy challenge for either the Government or our industry at all but the MDA has worked hard over the last years to witness positive developments in this regard and a future is on track wherein the public open spaces currently available will be increased.
UPPING THE ANTE
Another factor which needs addressing is how vital it is for our developers as well as providers to the industry become wholly capable of operating as true professionals. The basic rules and procedures of how one should operate, how to effectively manage an efficient construction site, how to deal with third-parties and with all the procedures involved, how to abide by approved safety procedures, how to adopt and implement a Quality Control mind-set, how to apply and abide by regulations and a myriad of other factors are not yet being properly adhered to by the entire market.
We are proud to note that the MDA members are aware and respectful of these factors, and we are reaching out to those market players who are not yet members of our association but who have entered the world of property development rather recently, so they can become aware of today’s reality of property development, thus making their work safer and their end results more agreeable to Malta’s objectives and vision for its regeneration and development. We believe and wish that the MDA can continue to bask in the reputation, respect and credibility it has earned for itself over these past years from the Government, industries which are inter-dependent with that of development, and other industries and sectors in general. We strive to create an environment where a sense of professionalism and seriousness will be prevalent throughout the industry; feel that this will lead the industry to a situation where it will no longer be politicised – indeed we can today witness a synergy being formed with our industry from both sides of the House of Parliament. And we are slowly but steadily gaining the general public’s respect that we believe we deserve. Today our industry employs 37,500 persons, directly or indirectly, and studies we have made and which are updated by KPMG every year show a constant and significant increase in registered employment. These statistics show why it is important for stability to remain constant and get even stronger. There may always be speculation on property but its necessity for Malta’s economic growth is now indisputable.
PROPERTY TRENDS
If one looks at how land prices have developed and how this was absorbed by the trends that developed alongside, one would note that when land was not so expensive people lived in a large house…. or in terraced houses at a later time. This in turn gave way to a demand for maisonettes when land prices increased and, as the trend continued, buyers moved into apartments and then to smaller apartments.
As I see it, as land prices increase this creates a constraint on the value of the land product so a developer needs to find ways of challenging this affordability aspect to compensate for the rising costs of land.
Comment