Residential rentals are passing through a very good phase and there is still much room for growth. Commercial rental such as office space is, on the other hand, not so rosy. This golden phase in the residential rental market is attributable to the consistent stream of foreign workers who are finding Malta a work-rich haven. However, if this upward trend is to continue, Malta must become more attractive.
Residential rentals are going through a very good phase. Indeed we may even say that there is a lack of the availability of such rental properties as foreign workers are still flowing into Malta. The demand is still high and the supply has not yet caught up. That is my current analysis of the development situation at the moment. As many families were busy with their back to school preparations, the MDA has been busy observing the current state of the construction industry and the developments in the various economic fields. There are many sectors of society that are still finding it difficult to find enough staff, and foreign employees are the answer to our problems.
“Hotel, factories, etc- all these and many others require more people in the workforce, and these are seeking rental properties“
Hotels, factories, etc – all these and many others require more people in the workforce; and these are seeking rental properties. Hence, if you limit the foreign workforce, there will be a negative effect. The MDA disagrees completely with the moratorium on foreign drivers, for example. This is a question of demand and supply. There is a huge demand for taxis, which will lead to more competitive rates, more use and last but most definitely not least – fewer vehicles required to be purchased by our new generations, less traffic congestion and parking; and a higher propensity to utilise taxi services when incapacitated (as one should always do without fail); thus moreover reducing our road’s mortality rates.
COMMERCIAL RENTALS SLOW DOWN
The commercial rental markets have however stalled somewhat. This could well be because the country currently is not seeming to be attracting sufficient market players within industries which require such development, such as financial institutions, gaming etc. This lack of attraction of Malta in these markets could then be in turn attributed to a mix of elements; be it forthcoming tax harmonisation endeavours imposed by the EU, Malta’s previous temporary grey listing, or the excessive bureaucracy which seems to be entrenched in government and national agencies. Red tape makes it very difficult for companies to open in Malta as it is a hidden cost which is not readily acceptable by prospective businesses.
“From the acquisition of property to actually starting work on it, the process has been lengthened considerably. …. the sites are taking much longer to go out on the market”
Yet another major stumbling block is the banks: still too slow in assisting companies to open their bank accounts. Companies are finding this to be a big hurdle and this is making us less attractive.
PROMISES OF SALE UP BY 7%
Property sales are also still on the rise. This year’s month of July had a higher sum of promise of sales than that of its 2023 counterpart. Also when one compares January-July 2024 to the same period in 2023, one observes an increase of circa 7%. The property market is still highly attractive. I do however see some clouds on the horizon: the supply is declining and the availability of property for sale is thus waning.
This is attributable to the increase in declines of the issuance of permits by the Planning Authority and by excessive bureaucracy in the Building and Construction Authority (BCA)’s issuing of clearances. From the acquisition of property to actually starting work on it, the process has been lengthened considerably. This has led to two results. One is that the sites are taking much longer to go out on the market. Secondly, developers are preferring to build and rent out directly themselves rather than build and sell.
A DOUBLE-EDGED SWORD
As always, a strong property industry is a double-edged sword, as those who are seeking accommodation, whether to buy or to rent; will perforce get direct cost-reducing gains from a weakened market. The Housing Authority is doing a lot for people in rental properties. There is help for the Maltese who seek to live in rental properties with thousands of euros being given in direct help. Schemes for first time buyers as well as proposals which the MDA are presenting for the upcoming budget are elements of this governmental assistance. And the MDA is putting forward some innovative ideas to keep the industry sustainable and creative. We have an open channel of communication with government and the discussions are regular and positive.
“the MDA is putting forward some innovative ideas to keep the industry sustainable and creative”
MALTA’S GREAT POTENTIAL
With the 2025 Budget round the corner, the MDA hopes and trusts in increased governmental capital investment in infrastructure. Malta has great potential and this has been particularly in evidence over the past few years: Malta operates 12 months in a year and there are no ‘down’ months. Furthermore, the home ownership rate in Malta is over 80%, making our country the envy of bigger nations. Governmental intervention has proved to be crucial in upholding these figures..
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