There is no doubt that the construction industry is one of the main pillars of Malta’s economy and, as such, it deserves to be given attention.
Employing over 12,000 workers, the construction industry contributed Lm48 million to the country’s gross domestic product in 2003, a Lm7 million increase compared to 1997. While other sectors of the economy were in difficulty, the construction industry maintained a positive trend.
Recently, the Building Industry Consultative Council within the Resources and Infrastructure Ministry commissioned a report aimed at finding out what action the stakeholders consider is needed in order to continue building on what has been achieved so far.
One of the areas which was scrutinised in the report was the workings of the Malta Environment and Planning Authority. Several positive points were raised by those interviewed, but there are other negative issues that they felt should be tackled as soon as possible.
Among them is the delay in the processing of applications as well as what the stakeholders referred to as a two weights and two measures approach to situations that are considered similar.
The stakeholders believe that there should be a limit of three months for applications to be processed. While it must be admitted that there has been an improvement in the way Mepa deals with the hundreds of applications it receives, the stakeholders do not think this is enough and are calling for more accountability.
On the other hand, one must understand Mepa’s limited resources and its inability to work as quickly as it would like. Mepa itself would stand to gain if it was able to process
applications at a faster rate but we understand that it has limitations. Nonetheless, every effort should be made by the authority to speed up procedures.
Another important aspect that was dealt with in the report concerns the demand for housing and the issue of property prices, which are constantly on the increase despite the fact that, generally speaking, Malta’s economy is passing through a delicate phase.
Malta’s limited space has always meant that the cost of property is high. But can we afford to allow the price of any kind of dwelling to rise sharply, year in year out? It seems that we can because, in spite of the regular increase, people still continue to buy. Yet, it must also be admitted that several families, especially younger ones, are under enormous pressure because of the loans they have to repay on property they have purchased.
Will there come a time when the price of property will fall because people will no longer be in a position to pay the prices that are demanded? Or will people continue to make sacrifices, perhaps even depriving themselves of other commodities or living a “poorer” lifestyle, just for the sake of buying property?
As long as people continue to buy property regardless of the cost, then property prices will continue to rise.
What is also of concern is that building costs, as well as the cost of materials and products used for building, varies so much – depending on the place from where they are bought.
A list of such items provided in the report shows an enormous fluctuation in prices.
Social housing is another subject that was tackled in the report, which says that demand continues to increase. Changes in lifestyle – the increase in the number of single parents and separated people and the fact that disabled people want to live on their own – have helped the demand for social housing to grow.
The Housing Authority more than doubled the amount spent on social housing construction projects between 1999 and 2003. And it is expected that demand for social housing will continue to rise. One hopes that, with the Housing Authority’s resources being what they are, it will continue to be of help to people who are in need of support when it comes to purchasing property.
All in all, the BICC report provides much food for thought. It was the first of its kind but the exercise is expected to be repeated every year. In this way, we will learn more about the trends of this important industry.