With every general election and electoral manifesto come property proposals. This time round it was no different as Malta’s main two political parties have chosen to target youths and low-income earners in their proposals about property.

Last week the Labour Party announced how first-time home buyers will be entitled to an annual grant of €1,000 per year, for 10 years, while the Nationalist party announced that, if elected, youths buying their first property will get a 50% government subsidy on interest rates payable on loans up to €250,000, for the first five years of the loan.

Many are of the idea that with such proposals in place, property market prices will shoot up.

The Malta Independent sent questions to real estate agents to try and understand the consequences of such proposals and what could be done to better the future of the property market itself.

Cecil McCarthy, director of Casa Rooms, Rooms Malta and secretary for the Estate Agents council, said that it is not a question of what both parties are going to give in monetary value but rather how it is going to be administered.

Speaking about both the PN and PL property proposals, he said that “first and foremost I would restrict the schemes to specific areas”.

He said that by doing so, problems such as traffic and the high prices in the property market can be controlled better as people would be more inclined to buy in areas which are not sought-after and benefit from such schemes.

In explaining his reasoning, he said that such schemes should not be benefitting people buying properties in popular areas such as Sliema, Gzira, San Pawl tat-Targa or Naxxar, as these are sought after metropolitan areas.

“These are areas where prices are already high, and which also drive the prices up for the rest of the island,” he said.

McCarthy said that it is areas like Fgura and Kalkara, which should be benefitting from these property schemes, as both areas are not popular.

Explaining his views on Kalkara, he mentioned the failed Smart City project. McCarthy explained how the project remained a failure as funds from abroad stopped coming in.

He said that since nobody wanted to go to Smart City government started using the buildings for its agencies. He said that to revive the project, the demand needs to be increased for the area.

Mentioning the equity sharing scheme, he described it as one of the best government-property schemes as it helped many achieve their dream of buying a home.

McCarthy explained that it would be beneficial if all property government schemes were to be rediverted to benefit people buying into not sought-after areas only.

“By putting such schemes to benefit areas which are not sought after, it could help regenerate the area, not increase the demand in the usual towns where the prices are going up. Moreover, there would be better traffic management. Apart from that, you would also be helping people, who cannot afford to buy their home, in the current property market,” he added.

In answering questions sent by this newsroom, speaking on behalf of Engel and Volkers, Benji Grech said that both the PN and PL proposals for the property market are motivating and supporting individuals jumping onto the property ladder.

Grech said that it is essential for people to buy as it is essential for the economy and “as we may not all be aware there is a huge oversupply of units”.

Speaking about the PN proposal, which promises youths buying their first property a 50% government subsidy on interest rates payable on loans up to €250,000, for the first five years of the loan, he said that in his opinion this mitigates the potential of further price increase as the relationship is ultimately with the bank.

In describing the PL proposal, which promises first-time home buyers an annual grant of €1,000 per year for 10 years, he said that “an annual contribution of €1,000 is a little like throwing money at the problem”.

Grech said that they will affect the first-time buyer property market by giving a reason for developers to continue to develop low cost housing. He added that this is really not needed as “retrofitting” should be the focus.

Grech said that for there to be regulation of the property market prices there needs to be full transparency. He urged the public registry and the government to officially begin publishing all the contract prices down to the street and property type. Such measures would ensure that all stakeholders know what type of property is selling for what price. He added that it is a common practice in all other EU countries.

Other property agents, contacted by The Malta Independent, did not reply to our questions.