There is a total of Lm25 billion worth of property in Malta, of which 23 per cent is not occupied and a third of which are summer residences, according to University of Malta head of banking and finance Professor Joseph Falzon yesterday.

Prof. Falzon was speaking during a seminar entitled: “Real Estate, Opportunities and Challenges for the Future”, held at the Hilton’s business centre.

Prof. Falzon compiled various statistics and said that between 1987 and 2006, property prices had increased six-fold. In fact, in 1980 the average property price was just under Lm20,000 per unit.

This increased to just over Lm40,000 per unit by 1996. Ten years later, statistics show a massive leap to an average of Lm100,000 per unit.

He also pointed out that Malta had a particular situation where property prices were increasing sharply despite the number of vacant units. He said that in 1995, the last data available showed that some 23 per cent of properties in Malta were vacant. To put it into context, he quoted figures showing that in 1957, there was a total of 75,610 housing units in the country, of which 4,632 were vacant (6.13 per cent).

Ten years later, the total number of units increased to 88,315, of which 12,980 (14.7 per cent) were vacant. In 1995, the total number of housing units mushroomed to 125,574, of which a substantial 24,065 (19.6 per cent) were vacant. The trend continued in 1995 when there was a further increase to 155,202 total housing units of which 35,723 were vacant (23.02) per cent. He did, however, concede that one-third of this number were summer residences.

Prof. Falzon said that over the past six years, the country had produced the next 10 years’ demand for flats and maisonettes.

He also delved into the area of bank loans and produced statistics showing that in 1980, the outstanding amount of liri in house loans was negligible. “In 1994, this figure rose to Lm100 million and in 2001 it rose again to Lm250 million. But the latest figures show that the total amount of outstanding house loans is in the region of Lm800 million,” said Prof. Falzon.

Prof. Falzon said that the figures begged the question: “Are some potential buyers being left out of the picture because they cannot cope?”

Mr Douglas Salt, from the Malta Federation of Estate Agents also addressed the seminar and said: “Are we all going stark raving mad? At first glance, the number of units we are creating seems daunting. But we have to bear in mind that there are many large-scale developments which are being released gradually onto the market.”

Mr Salt said the country needed to do more to encourage property buyers from overseas to choose Malta as a domicile. “Other nations pump millions into advertising to attract people over and we need to spend more. Malta has its strengths and weaknesses, but we do suffer from a lack of exposure in the overseas media. We need to put Malta back on the map,” he said.

He said that Malta’s strengths were the use of the English language, the safety of the island, the weather, favourable tax conditions for foreigners and the lifestyle.

Mr Salt said that Malta was lacking in adequate office space, “There is a need for more, especially with the advent of gaming and ICT companies setting up shop in Malta.”

Adrian Said of EMCS Ltd, who organised the seminar, said that the most obvious matter at hand was to bridge the gap between demand and supply. “UK citizens spent Lm5.5 million on property overseas last year. We must step up our marketing effort, not only on capital projects, but for Malta in general,” he said.

He pointed out that Malta had a good regulatory framework for business, good standards of hygiene and health, education and culture. “On the other hand, we need to polish up on our attitude towards the environment, our transport network and cost of living. Air links to the island also need to be improved,” he said.

Mr Said also commented that Malta had positives in the fact that it was an ideal location, the use of English, that it is a friendly place and above all, the lifestyle.

He said that Malta needed to focus on the nitty-gritty to improve its image, before giving a short presentation accompanied by photographs showing hilarious (and dangerous) crazy happenings here, such as dilapidated buses carrying advertising boards to use public transport, overladen trucks and complete disregard for health and safety regulations.

He concluded by saying that Malta needed to focus on its branding. “Aesthetics are important. Do we want our buildings to retain their character? Or do we want something similar to Hong Kong? Either way, we must decide,” he said.