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Karl Stagno-Navarra
Prime Minister Lawrence Gonzi’s public prediction that the recently approved extension of development boundaries will trigger a decrease in property prices has continued to gather opposing opinions from real estate experts.
Following last Sunday’s outburst in MaltaToday by Dhalia business development director Chris Grech, who insisted that “the Prime Minister was wrongly advised”, Frank Salt – another real estate expert – joined the foray by stressing that the new boundaries will not reduce property prices.
“The people who own land that is now earmarked as a development zone, will either sell it or develop it at the going market prices. They will certainly not sell other than at the going prices”.
Frank Salt went further to explain that the “risks” the economy would run into are when property prices continue to increase or else decrease.
While stating his total agreement with the Prime Minister that property prices cannot keep increasing by 15 per cent each year as is the current trend, Frank Salt stressed that what the economy needs is to have property prices stabilised.
“This would allow development to continue, jobs and money would continue to be generated, and the market would continue to be healthy, and technically affordable through competitive bank-lending schemes.”
Frank Salt explained that demand for property goes purely according to what the market is prepared to pay. “Affordability is key to a healthy real estate market,” he insists, while adding that “overpricing would definitely destabilise a vibrant property market”.
He brands the Maltese as “the most educated and well informed property consumers in the world”. This fact, he says, is evident in the way the Maltese diligently shop around, comparing prices, locations, and so many other things while choosing a property to buy, including its future market price.
According to Salt, a situation where a reduction in volume demand would occur has not been registered yet, however he warns the risk could come about should the market be “flooded” with luxury high-priced properties.
The development of large-scale projects earmarked for Jerma-Palace, Mistra Village, Tigné, Manoel Island, Holiday Inn, Fort Chambray, Imgarr, The Palms, Pender Place, The Towers in Qawra, Msida and Marsa, and Ta’ Monita, will bring onto the market hundreds of new units that would definitely have to attract foreign buyers.
Frank Salt is of the opinion that at the prices these units will be selling for, only a few Maltese would actually afford them: “This would require all the developers involved to start adequately marketing their properties abroad, and perhaps reap the same positive results obtained by Portomaso,” he said, while concluding that this strategy could potentially place Malta as a prime and attractive residential opportunity like Spain, France, Portugal, Greece and Cyprus.
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