More affordable property for everyone
Do you think that the economic model that is being used to run our country at the moment, especially the model used in the property market, is sound?
It appears that a proportion of Maltese society is seeking to make as much money as possible from the property market. Why? We are seeing a big influx of foreigners that are coming to Malta for a number of reasons, the main one being to work, at all levels in different sectors including the financial services, iGaming, construction, catering and health. By renting or selling property, apartment owners are raking in money thanks to this phenomenon of foreign workers.
Some economy commentators say that this is a good sign as, according to them, the economy is growing. However, when we talk about policies, the state needs to be far more conscious of the consequences of certain policies. One must consider how policies affect people. Therefore, the economy should not pander to greed but needs to have a moral fibre.
In the past there was the idea that, to reduce the cost of property, we need to add storeys to buildings. Now the inclination is to build smaller units because the price of property has risen. This gives rise to speculation. The Government should have a plan of action to address such a situation or we will end up living in a jungle where everyone does what they want to do. Whoever is well off will continue to grow and those who are struggling will continue to struggle further. The Government acknowledges that it has the responsibility to do something but, maybe, it is not fully appreciating the difficulties.
A Report of the International Monetary Fund says that affordable accommodation in Malta, if things continue going as they are, can cause a collapse in the sector within five years. This is because the price of property, at the rate it is rising, is not sustainable. In spite of the fact that property prices rose over a number of years, there are moments where the price rises and falls. The problem is that in the last two years, the price of property shot upwards, increasing by up to 30 to 50%.
This is causing a reality where the salaries are not commensurate with these types of increases. There are those who, especially foreigners, are buying expensive property but those who are looking for affordable accommodation or are on the poverty line are being left with no options. This may lead to more people joining the poverty line. The Government needs to buck up and address the situation with urgency.