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Property market ‘quiet’ but opportunities exist Gerald Fenech 29 January 2009

Like all sectors in the local economy, the property market is currently suffering from a slowdown although there are opportunities with prices correcting themselves and some good bargains already available, The Malta Business Weekly has learnt. Speaking to this newspaper, Trafford Busuttil, chairman of the Malta Federation of Real Estate Agents explained that although the market is quiet, there are a number of opportunities which have presented themselves and which should be snapped up before an inevitable rise in prices. “The reality is that the market is relatively quiet even though it is always traditionally very quiet in January. To understand what is happening today one must take a look at what happened between 2003 and 2008. Over the past few years, it seems that the majority of Maltese with disposable funds became developers. They saw the market doing exceptionally well and thought that the only way for this industry was up. However, people failed to understand that the market they were investing in was also fuelled by a number of fiscal amnesties, in particular two overseas fund repatriations and another amnesty on cash funds held at home. A large portion of these funds found themselves into the market, since the island is extremely limited in the investments it offers and above all because the property market is a safe market. This was a spiked period and it was obvious that things were to go back to pre-boom levels, as in fact has happened.” Asked which sector in the market was experiencing any growth, Mr Busuttil said that the maisonette sector was experiencing a “marginal” increase. He said that current market combinations such as historically low interest rates and price decreases have made this the right time to invest in property. “This is a time of opportunity to invest in property. Prices are corrective, rental returns have never been higher, bank interest rates have been reduced substantially and local banks are willing to lend up to 90 per cent of the property value. This is a great investment opportunity and should not be missed as it will take another 80 years to repeat itself. Many people must ask themselves, are prices going to go down further? Naturally, only time will tell. I am actively looking at acquiring a second property as opportunity only knocks once,” added Mr Busuttil.