Development of property in Malta needs to dramatically fall
Tuesday 12th of July 2011
The oversupply of property in Malta is causing grave problems for the country’s property market and the government should step in immediately to control the development of new properties. That’s the view of a leading Maltese Property expert who believes that the relaxing of planning regulations in Malta over recent years has caused huge problems for the country’s property market.
Huge supply of Property In Malta pushing prices down
A recent Central Bank Financial Stability Report has acknowledged the weak state of the Malta Property market at a time when more and more properties are coming up for sale despite low demand.
The report states: “The slow-down in the property market… raises credit risk associated with these projects. In particular, additional supply of housing units may extend the period of lull in property prices.”
Martin Scicluna, writing in Malta Independent, believes that the oversupply of Property In Malta is the leading cause for the current ‘parlous’ state of the property market.
He writes: “There is an over-abundance of supply of properties, creating a buyers’ market and this is pushing prices down.” In addition, competition from other Mediterranean countries such as Spain and Portugal is resulting in fewer wealthy foreign buyers snapping up Property In Malta.
Mr Scicluna reports that there are 76,000 buildings in Malta lying vacant, up from the 53,000 identified in the 2005 national census. This number is also set to increase as a pipeline of approved developments is completed.
Mr Scicluna writes in Malta Independent: “The several millions of euros of unproductive investment these empty properties represent is an appalling indictment of government policy and a poor reflection of Mepa, as the regulator, to bring matters under control.
“The argument for a freeze, or at the least a steep reduction, in new development applications is now unanswerable.”
