Better housing for all

Successive Maltese governments have made housing one of their aims. As a result, we have one of the highest rates of home ownership, and property is the main asset of Maltese households.

However, the property market has had its ups and downs. During the last Nationalist administration the housing market passed through rough times. Eurostat data show that from 111.4 in 2008, house prices fell to 103.7 in 2012. This 7% fall in house prices was unprecedented in recent history. The number of properties sold in 2012 was 3% lower than in 2008. Investment in dwellings fell from €343 million in 2008 to €214 million in 2012. The number of development permits for dwellings declined from 6,836 to 3,064.

The decline in housing activity had a negative impact on households. Existing homeowners saw their main asset decline in value. The waiting list for social housing rose from 2,209 to 2,773, an increase of 26% in four years. Eurostat’s Harmonised Index of Consumer Prices shows that rents rose by 10% between 2008 and 2012. As a result of all these negative developments, the EU’s Survey of Income and Living Conditions reveals that whereas in 2008 30% of Maltese households faced a heavy financial burden due to housing costs, by 2012 this proportion had nearly doubled to 59%.

Faced with this situation, Joseph Muscat made reinvigorating the property market a key part of the administration’s strategy. The results have been very promising. House prices have not only recovered their 2008 level, but have reached new levels. The number of properties sold is up by 55% over 2012. Investment in dwellings has risen to €384 million in 2016 or €40 million more than in 2008. Development permits last year reached 7,508, the highest since 2007. The property market has clearly recovered.

After having increased by 564 persons, or 26%, during the previous administration, the rise in the waiting list for social housing rose by just 89 in four years. Despite having building permits for 16 sites, some of them in hand since 2005, the previous administration had stopped building new social housing. This administration has already started building a number of units on some of these sites. 

With Joseph Muscat as Prime Minister, there will be 640 new social housing units on these sites after a €50 million investment. This will be just the beginning of the most ambitious social housing programme seen in our country. While doing this, as Joseph Muscat has already said, we will be changing the culture of social housing in Malta. 

Social housing needs to go to those most in need. It needs to help people get on with their lives and help them move forward. It cannot become a poverty trap like it was in the past. Like we have done with other social benefits, we are committed to turn social housing into an active incentive for people to fulfil their real potential.

Rents have continued to rise. However this administration has taken steps to address this. We have removed the rise in social housing rents that had been introduced by the previous administration. We have changed the eligibility conditions for the rent subsidy scheme so that twice as many can qualify for it. We have also doubled the rent subsidy, while making sure that contracts are registered so that the government does not condone irregularities. These policies will not only continue, but will be enhanced in coming years. Simon Busuttil, on the other hand, appears to not even be aware that these schemes exist. In fact, in his manifesto he has pledged to introduce them!

One of Joseph Muscat’s main policies has been the exemption of first time buyers from stamp duty. This is equivalent to a saving of €5,000 for our young couples, which has made a real difference to their lives. This and other measures taken by this administration have reduced financial burdens related to housing. It is therefore no surprise that the EU’s Survey of Income and Living Conditions indicates that the proportion of households facing a heavy financial burden related to housing has fallen back to 34%. We have nearly reversed the entire rise observed under the previous administration.

If re-confirmed, Joseph Muscat will extend the reduction in stamp duty also to second time buyers, to help further households reach their aspirations. We will put on the property ladder those who currently are cut off as they cannot save enough for the initial deposit. We have already created a scheme with APS bank to turn social housing beneficiaries into property owners. This is but the start of a much larger programme that will create a new generation of homeowners in our country. 

The best days for our country are yet to come.

Glenn Bedingfield is a Labour Party candidate on the second and fifth districts