Construction is everywhere and it is no wonder, as the Planning Authority (PA) churned out no less than 12,485 dwelling applications in 2019. This was one of the highest number of dwelling permits approved in the space of a year since 2000.

According to statistics published by the PA, the highest-ever number of planning applications approved was recorded in 2018, at a staggering 12,885.

Previously, the highest number of dwellings approved was in 2007, with the PA green lighting 11,343 dwellings.

The lowest number of planning applications for dwellings was was in 2013, when only 2,707 permits were given.

For 2020, the PA said that, 771 dwelling planning applications were approved in February, which is a decrease of around 200 when compared to February 2019, and 400 when compared to February 2018.

Last month saw 683 new apartments, 59 maisonettes and 23 terraced houses approved.

February 2019 saw 1,000 dwelling planning applications being given the green light, whilst 1,231 permits were given in February 2018.

Apartments made up the majority of permits approved, with this type of dwelling making up for 89% of all dwelling permits approved in February.

In 2019, apartments accounted for 85% of all dwelling permits approved.

In 2019, PA approved the highest number of maisonettes (1,226), whilst 1076 apartments were approved, as well as 402 terraced houses.

The number of dwelling permits approved has increased consistently since 2013. 49,038 new dwellings having been approved since then. The number of permits given has now exceeded the level as that approved during the property boom between 2005 and 2007.

House prices

Malta’s buoyant house price increases over the last five years have been supported by a number of factors, including Malta’s fast-growing economy, as well as low-interest-rate environment, disposable income and the rising number of foreign workers in the country.

Prices were also boosted by government measures, including the exemption of first-time property buyers from a 3.5% stamp duty on the first €150,000 of a new property’s value. In 2018, another scheme was introduced, making second-time buyers eligible for a stamp duty refund of up to €3,000 if they plan to replace their current residential homes. Homeowners with disabilities can avail a higher stamp duty refund of up to €5,000.

It is also believed that the upswing of house prices in recent years is also due to the Individual Investor Programme (IIP) targeting high net worth individuals, introduced in the government’s November 2013 budget.

The surge in approval of new dwellings between 2005 and 2007 coincided with a relaxation of building heights in urban areas. It also coincided with Malta gearing up for adoption of the single European currency, when more people started channelling their undeclared money into property development, fuelling a property boom. A supporting factor was the Investment Registration Scheme, a tax amnesty for Maltese residents with overseas assets, effective from 2001 to 2005.

In 2008, the world, including Malta, was hit by a recession, and despite a short respite in 2011, house prices fell further in 2012. House prices then recovered strongly in 2013, due to government’s launch of new property-related measures. Strong price rises continued from 2014 to 2018.

According to the Central Bank of Malta, house prices in Malta were still rising in 2019, with a sharp increase of 10.83% during the first months of that year. The increase was seen across all property types, most prominently for villas, houses of character and townhouses.

214 dwellings given permits in ODZ land

2016 saw a steep increase in new dwellings built in outside development zones (ODZ), at a percentage of 3.8%. This number, in 2019, was at 1.7% of the total, up from 1.1% in 2018.

The actual number of new ODZ dwellings remains higher than that approved in any single year since 2010, except for 2016. In 2019, the PA issued permits for 214 ODZ dwellings.

In 2019, nearly 28% of dwellings are being developed on virgin land, an increase from 24% in 2018. This percentage has decreased significantly since 2000 when the percentage stood at 70%.

This signifies that in 2019, 72.1% of the dwellings given permits, were to be constructed on already developed land.

90 appealed decisions

The planning application process can go through a cycle whereby there is a first decision, a reconsidered decision and an appealed decision. When an application is refused or is approved with conditions which one feels are unacceptable or unreasonable (limited to certain issues, as per law), one can either request to reconsider the decision or submit an appeal to the Environment and Planning Review Tribunal.

The number of appealed decisions stood at 90 in 2019, a stark contrast to the one appealed decision taken in 2017. In 2018, 70 appealed decisions were taken and since 2016, no reconsidered decisions were taken.

Prior to 2013, the number of appealed and reconsidered decisions was significantly higher, with 2012 having 208 reconsidered decisions and 201 appealed decisions.

More demolitions than conversions

While 5,367 dwellings approved in 2019 were the result of the demolition of older buildings, 2,665 were the result of the conversion of existing properties.

Conversions remained relatively stable between 2000 and 2004; 2005 experienced an increase, followed by a decline in 2006 and an increase in 2007 and 2008. This was followed by a decline between 2009 and 2013 and a sustained increase since 2014. The number of conversions in 2018 was the highest ever but so was the number of units replacing demolished buildings.