The paper published last weekend by the Diocesan Commission for Justice and Peace, expressing concern about the escalating cost of property, was a veritable bombshell. Never mind the fact that its belated publication indicated a delayed-action fuse.

The paper denounced the endemic and uncontrollable speculative practices in the property market, and urged the political and social players to treat this issue as a top priority for immediate concerted action “if they truly believed in social inclusion and a sustainable standard of living based upon the foundation of the family as the main contributor to a healthy society”.

Bold challenge

The challenge is bold and the language forthright. The commission declared with emphasis that “a truly anti-poverty and sustainable standard of living approach cannot exclude housing from the collective aspects of the common good, which, incidentally, also includes the right to work, food, education and health”.

Available statistics are eloquent enough. The average compounded cost of apartments is estimated to have increased by no less than 56.5 per cent since January 2004. The relative price for maisonettes increased by 48.6 per cent during the same period.

There are too many fingers in the pie, including estate agents, middlemen and an assortment of other intermediaries with the right of substitution. This sometimes involves property that changes hands a number of times at the purchase/demolition/development stages, before acquisition by the ultimate owner. The system facilitates speculative practices that generate artificial inflation.

National economic interest

Yet another aspect leading to inflationary costs is the knocking down of property before the elapsing of 10 years from its original construction. The commission, quite rightly, remarked that this is leading to a wastage of the cost of materials used in the building and the finishing of the property, and is also leading to a wastage of economic resources. It imposes an unnecessary strain on Malta’s economy, increasing the import/export imbalance without creating any added value”.

If the Malta Environment and Planning Authority does not concern itself with all of this, who is there to look after the national economic interest?

As a result of all this, the majority of young couples falling in the middle income group have to resort to home loans equivalent to 80 per cent of the cost of property.

The repayment of these loans over an average period of 35 years equates to an annual payment varying from Lm2,300 to Lm3,200 excluding added insurance costs.

The inflation rate of property prices is well in excess of the average annual increase in wages and salaries.

Something has to give

It is obvious that, unless timely remedial action is taken at an official level, something has to give.

It is neither fair nor socially acceptable that this situation be allowed to deteriorate further, when the stock of vacant accommodation runs into several thousands.

Unbridled speculation, compounded by property hoarding, is denying the right of access to young families who aspire to decent and affordable accommodation and a dignified life.

For far too long, the government has been toying with proposals to provide inducements that would encourage the release of the unutilised stock of vacant property for rental purposes. It has been long on verbosity and short on action with regard to revising the rent laws. The kissing has to stop. And the first stern measure to bring sense to the prevailing Malta scene is to contain speculation.

In this vital regard, Mepa has been useless.

Malta’s raw nerve

The Diocesan Commission for Justice and Peace has put its finger on Malta’s raw nerve. It declared that it is “very concerned about the endemic and speculative practices in the property market” and called upon all the political and social players to consider this issue a top priority.

So far so good – but there is more to it than speed.

The most essential ingredient in the proposed recipe for future action is this: anyone who is involved in any action plan must have no ties with the property market, however remote. This is an urgent task to be entrusted to a dynamic supremo with clean hands and no possible conflict of interest, and who is acceptable to all the political and social players.

Is there such an animal in the Maltese jungle? And would all the political players be interested in working together in an election year?

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