The property market and property prices seem to be making the headlines on a daily basis of late.

One concern seems to be property price inflation as reported by several sources. The figures for year on property price increases seem mind-boggling and to many of us agents a little far from the truth we are seeing on the ground. We are left wondering where these figures are coming from and what methodology is being used.

Coming up with a figure for year on increases in the Maltese market context is far from easy. Different streets in the same locality fetch different values, so averaging a locality will result in an inflated figure for the town or village. Advertised prices differ from selling prices, so averaging these will lead to a flawed figure too. Contract prices will also lead to a flawed figure. Why? The government has been successful in the past two, three years in stopping to a large extent under declared values. So these years are bound to show large hikes in selling prices. No system of collation can give a true picture at present.

What is certain is that luxury properties have seen large increases. Why? There are few villas in nice villa areas on the market and when one does become available there are a number of takers. This does not mean that they achieve some of the prices being quoted and what is ridiculously priced does not sell – as simple as that. If the owners were keen to sell then the price would have to go down.

People’s lifestyles have also changed, with families preferring luxury apartments that provide a lifestyle with gardens and pools, rather than having to maintain and clean large villas.

This has created a new demand for luxury developments and driven up the prices of these apartments.

So in the last few years, luxury properties have been above average increases in prices – a trend that will probably continue for a while.

On the lower end of the scale the picture is quite different. In fact, the Lm40,000 – Lm80,000 range has seen only marginal increases in prices since the end of summer 2004.

Much talk is making the rounds about first time buyers and the difficulties they face when buying a home. Forty years ago there would not have been such discussion because they would not even contemplate owning a home – they could not afford it and would have had to rent instead.

So what has really changed in 40 years – attitudes are what have changed. Attitudes and an insistence on owning the impossible and not considering the element of compromise.

Is it absolutely necessary for first time buyers to own a three-bed roomed home straight away?

Is it absolutely necessary for first time buyers to own a new property and insist on nothing old?

Is it absolutely necessary for first time buyers to buy within a few square miles of where they were brought up?

Can you imagine somebody born and bred in Dublin insisting on buying a property in Dublin today as a first home? It would be unthinkable and unaffordable.

What is so different in Malta? Why cannot attitudes change? Why are our European counterparts selling 60 square metres to first time buyers while we in Malta are getting comments that 110 square metres is poky and small?

There are countless properties available at a price suitable for first time buyers if they change their attitude to location, size and finish.

One cannot expect to start off life with all the luxuries that come later with a successful career. As I said earlier, 40 years ago renting would have been the only option.

And have properties really escalated that much for the first time buyer?

In 1989, a three-bedroomed maisonette in Ibrag would sell for Lm26,000 on a salary of Lm160. Today it would sell for Lm85, 000 – Lm90,000 on a salary of Lm600. Is the relative increase that much higher?

Are banks really encouraging young couples to borrow more? To my knowledge, the lending criteria from the Lohombus era to the present day, has remained pretty much the name – ¼ of annual salary in repayments. The term of loan has increased but I see no harm in this, especially given the decreasing value of money. Lm200 today will be the same Lm200 in 10 years time but its value will be much less, while the value of the asset will be much higher. What have gone down are the interest rates. We paid 8.5 per cent in my day.

Contractors targeting the first time buyer market are doing their utmost to build units at an affordable price and less profit – knowing only too well that if a property is not priced well it will not sell. Larger developments are being built for this market at very reasonable prices – benefiting from economies of scale.

Of course first time buyers have to accept to live in these developments and not expect the impossible. Of course there are overpriced properties on the market, but at the end of the day these do not sell. What sells is what is well priced. Yes, even in Malta!

Mr Salt is president of the Federation of Estate Agents