As our market shifts into high-rise mode and Brexit poses key questions, RE/MAX Malta, managing director Kevin Buttigieg sheds light on what we can expect the real estate sector to deliver in the years to come.
Change is afoot. To begin with, the recent results of the Brexit referendum have posed questions for Europe that no one can answer. It’s a sad situation but the British people have spoken and now everyone needs to move forward.
I actually believe Brexit will be beneficial for Malta. As one of the only two English-speaking countries remaining in the EU, Malta stands to secure a good share of the business coming out of the UK. This is good news for many sectors, as such investors will rent offices, buy houses, eat at restaurants, purchase furniture, buy insurance, the list goes on.
Locally, people are worried that the property bubble might burst, but I don’t believe it will. Bubbles burst when an economy relies on one source of income, but our location, lifestyle, the economy and language have provided us with diverse options. There will also be several franchise companies that need to relocate from the UK now, and Malta could be their potential home. To facilitate this, our government needs to be more efficient and make it as easy as possible for them to set up and invest here.
So, between the increasing foreign interest and the steady on-going property purchases by locals, I see our real estate market as very buoyant. We’re witnessing all sorts of purchases: first-time buyers, commercial investments, people securing property for their children, direct foreign investment and those buying as a result of the IIP Citizenship Scheme. Plus, the fact that people can get between a five-and-ten per cent return on rental properties means we’re also seeing heavy investment in buy-to-lets.
Of course, the commercial side of the business is growing at an impressive rate too, largely thanks to the many foriegn companies setting up office here. This means we’re actually short of office space, as demand far outweighs supply. In fact, much of the commercial space currently under construction has been rented out, sometimes years in advance of when it will actually be used. This is also a sign that the market is exceptionally strong.
Looking to the future, high-rise buildings will help to increase the property stock in Malta without impinging on open spaces. In fact, if we had built more high-rises in the past, then there would be more open spaces today. In my opinion, the ideal model would be to take a piece of land – of say 10,000 sqm – and to develop 40 per cent of it, while dedicating the other 60 per cent to piazzas, coffee shops, gardens and open spaces. With good planning you can have high-rises surrounded by landscaped areas that are there for everyone’s enjoyment.
The benefits of high-rises don’t end there, because they can also be planned with expansive underground car parks that will help to alleviate our national parking problem and enable to the government to create some pedestrianised areas. People want to be able to sit outside and to let their children run and play; thus we need more outside spaces and this is the way to achieve them. The key issue here is for government to come up with good infrastructure that can support such development, as there’s no sense in having one without the other
The interest from the public in these high-rise developments has been astonishing with a show of confidence in eighty per cent of the projects prior to launch which only confirms that there is a high level of demand. This does not come by coincidence given that the planning of such endeavours have been taken up by some of the most prominent international architectural firms.
All-in-all there is a lot to be enthusiastic about when it comes to the future of real estate in Malta; these are exciting times. We do need to keep moving with the times and boosting our facilities – we need more high-quality family-friendly destinations, like water parks, as well as a PGA-licensed golf course. We also need to make the most of our countryside, as right now it’s not doing much for anyone; we need bike paths, tracks and organised spaces people can enjoy.
As for the industry itself, we will hugely benefit by the planned introduction of estate agent licensing, and the process needs to be sped up to enable the professionals in the market to do their job properly. At RE/MAX we take our training very seriously and invested a lot in ensuring our people know what they are doing and sharing the right information. With Malta’s future looking so bright, we need to be in a position to put forward a professional platform for investment, as that is exactly what will help our island to keep meeting and exceeding its huge potential.
This article was Published in the Times of Malta on Sunday 7th August 2016.