Ah! No longer a state of denial about residential property values in Malta.

The Chamber for Commerce, Enterprise and Industry has reported that residential property prices were down by 15 to 20 per cent in the first quarter compared with the same period last year. Anyone with a grasp of demand and supply fundamentals could have seen it coming. As I wrote in this journal over two years ago:

“In the short and maybe medium term, the situation in Malta will continue much as today with inflated values until the economic cycle downturns – as it always does eventually – and impacts on the property market, probably dramatically.

As large projects bring volumes of new quality units to the market, their company sponsors will have compelling reasons to sell. That should concern investors holding overpriced inferior property, who will then find out about the stickiness of a highly illiquid asset.”

The Chamber has done well to reveal the actuality of the market. It demolishes the fiction of the Central Bank’s advertised prices index, which two years ago I had called into question. Perhaps the CBM will now get its statisticians’ proverbial fingers out and rebase the index on completed transaction values.

However, to quote from the Chamber’s report: “Above-all, short-term business and economic objectives should not come at the expense of environmental concerns.”

Talk about closing the stable door after the horses have bolted!

For decades MEPA and its predecessor (with the blessing of their political masters) permitted ghastly ticky-tacky block developments with no serious strictures to blend in with Malta’s traditional architecture and streetscapes. The result is thousands of empty boxes and ugly shells which now – and will probably forever – pock-mark the face of the island. And this on a so-called Mediterranean “gem” reliant on attracting tourists for its main source of external income.

It is a rare developer that is concerned with how posterity will judge his projects rather than entirely focusing on the profit margin. However, it is an indictment of the short-sightedness of the governing political classes (both camps) that allowed uncontrolled building instead of constraining the developers and preserving Malta’s once acknowledged charm and uniqueness. That policy would ironically enough have sustained property values.

Sadly much of Malta is now aesthetically beyond redemption and the employment focus has to be on growing its industrial and knowledge services base. It would be a double tragedy if Gozo were to suffer the same fate rather than being sensitively developed.

Alex P Galea

Woking, Surrey

England