The scourge of vacant properties dotting the island, some 70,000 of them, has been a long standing bone of contention, with environmentalists arguing that further development should be halted until the problem is resolved. However, according to Malta Development Association vice-president Sandro Chetcuti, there is a solution in the pipeline.

Speaking with this newspaper, Mr Chetcuti suggests that the establishment of a new, more detailed property price index would help people who have vacant property on their hands to properly gauge the value of their property, and in so doing establish a benchmark sale price – the main hurdle for the owners of such property.

He explains, “From my experience, most of the vacant properties on the market are old and, more importantly, overpriced, which is a major stumbling block in reducing the number of vacant properties on the island. What I have found is that the owners of such property, many times people who have inherited the property, are not familiar with the property market and its fluctuations.”

The Malta Development Association (MDA) has been in discussions with the government over the prospect of creating a new property price index so as to provide indicative market prices per square metre for different types of property in different localities. 

“With such an index, at least they will have an indication of what their property is worth and where to start from when seeking to determine a proper price for their property. Once an index price is established, it could be used not just to establish a sale or rental price, but it could also be used for other ends such as tax purposes or stamp duty. An indicative price would help the government, as well as buyers and sellers.

“So far, the government has taken the proposal on board,” he says, “and I am positive that we could make considerable headway in this respect.”

But apart from those owners who are reluctant to let go of vacant properties unless their preconceived asking prices are met, Mr Chetcuti points out that vacant properties are part and parcel of the industry and that a certain amount of vacant properties is necessary for the proper functioning of the property market.

“I am not very worried about the other vacant properties, we have hundreds of developers on the island who are selling properties and they need stock. These properties are stock to property developers and every developer needs stock to be competitive, like any retailer, manufacturer or even a car dealer. This is also healthy for the consumer, because without the availability of such vacant properties, prices could go sky high.

“Sometimes we have a single developer who has many properties on the market, and that is his stock. But what does worry me is when I see certain sites that are ruining the overall environment – unfinished or deteriorating properties, which many times even pose a public danger.”

The property market as a whole, Mr Chetcuti says, is quite stable at the moment. 

“There are certain properties that are still in demand, which have more or less found the fair market value and their prices will not fluctuate dramatically. The higher end of the market is still in demand and at the moment we are very lucky in that there is a good-sized niche of foreign nationals investing in property in Malta. 

“As regards property for first time buyers, there is a mixed feeling. First time buyers now have a wider choice and there are professional developers who are building quality properties. But there are also certain investors who bought development sites at high prices and who have tried to pack as many units into the development as possible. These latter types of properties are no longer competitive.”

The most problematic property segment, according to Mr Chetcuti, are those properties that were over 15 to 20 years ago, which are not houses of character but which also lack the modern conveniences that today’s buyers are looking for – such as double glazing insulation, good size or en suite bathrooms, soffits, air-conditioning or lifts.

“Buyers are more discerning and lifestyles today are vastly different to those up to a couple of decades ago.  People today are after either a modern residence or a house of character and the properties in between these two segments are not doing so well.”

This, Mr Chetcuti explains, presents a regeneration challenge for developers. 

“For example, 25 years ago we had a situation in which there were a lot of plots all over the island, on developable land, that no one wanted to build on because the infrastructure was lacking. Today the situation is the opposite – now most developable land is committed to development and the infrastructure is also in place.

“The situation has now changed from vacant developable land to vacant properties.  Twenty-five years ago we had a lot of developable land that no one wanted to invest in, which no one wanted to develop at that stage.

“Now the situation is different. Because of the industry’s intense activity, the country has been developed in such a way that that instead of having thousands and thousands of empty plots to be developed, we have thousands of vacant properties that need to be regenerated.

“Like we did with this previously undevelopable land, now we have to deal with regenerating sites and vacant properties.  In certain areas the vacant properties need to be completely demolished, and in others we can change the use of the property, refurbish it, modify it, and upgrade it – that is the challenge.”

Mr Chetcuti insists that the MDA, and that he on a personal level, “are completely against the extension of the building scheme into the Outside Development Zones (ODZ).

“We are 100 per cent against that because we simply do not need it. There is enough developable land and sites for regeneration and it would be useless to continue ruining virgin land in the countryside. 

“At the end of the day we have to respect that this is a small country and we need the countryside to remain intact; we do not want to see buildings all over the island. From an environmental point of view, we are in favour of leaving the ODZs alone, maybe with the exception of certain sites that have deteriorated and that can be improved upon.

“There are eyesores with no character whatsoever within the ODZ, and a very positive way forward would be to try to attract investors to redevelop those eyesores into something which respects the characteristics of the area. No one wants to see eyesores in the countryside and as a country we should look into upgrading them and in the process upgrading the countryside.

The debate over the continued construction of high rises is a perpetually thorny issue but, in Mr Chetcuti’s opinion, building higher brings advantages from the perspective of creating more open public spaces, which the country is sorely lacking.

“In my opinion, building higher just for the sake of creating more units to sell is not beneficial at all. But building higher so as to be able to provide more open spaces for public use, while using the same building volume that results from the original footprint, makes a lot of sense in certain areas.

“Instead of building horizontally, we could put an effort into studying how to build higher while creating a better environment for everyone such as gardens, playgrounds and other public spaces.”

But still such solutions are not ideal for every part of the island, he says, adding that areas with traditionally low-lying residential buildings should be retained as such. According to Mr Chetcuti, the 2005 height relaxation policy, which allowed for higher buildings in areas outside village cores “was wrong in that there were a lot of beautiful areas that should definitely not have been included in the policy”.

The new government, Mr Chetcuti says, has adopted a proactive attitude toward the building industry, addressing problems with the Malta Environment and Planning Authority, which, he says, had become a major stumbling block as far as developers are concerned.

“Mepa,” he says, “needs to guard against certain types of development, but it also needs to be more business-friendly.  At least the government is really now making an effort to render it more user- and business-friendly. 

“The government is taking the right approach and I hope this will continue because developers need quicker reaction times from the authority. We must bear in mind that the property and construction industry go hand in hand with the tourism industry and the financial institutions – if the property industry becomes problematic, a lot of the economy will go down with it.”

The global residency scheme, he says, is a case in point. He explains, “When the previous government had suspended the scheme, it was an attack on the property industry and on the investors who wanted to invest in Malta. The damage has been done, and even though this government acted immediately to address the situation, it is not remedied at the stroke of a pen.  We are, however, definitely moving in the right direction. The MDA was on board with this issue and I think we gave a lot of very good input.

“The government is listening to us and this is very healthy for the industry.  To be fair, the previous government had also listened to the MDA’s suggestions in the last few months but it was too late in the day. The government should hear out the opinions of associations like the MDA, not necessarily to take everything on board but people from the industry know how their industry operates, they know the clients, they know where to invest – if you wait and do nothing you lose investment opportunities.”