Increased affordability is what property buyers and renters have to look forward to in the coming months, according to a new survey released by Belair Property together with Anchovy/Onest Data.
The survey was conducted between 24th April and 5th May 2020, and it reveals insight into current and future perceptions of Maltese property in the context of the COVID-19 pandemic.
With over 1,000 respondents including property owners, tenants, landlords and banks across Malta and Gozo, the survey presents views from a cross-section of the Maltese general public.
“This survey clearly shows a general – and justified – perception that especially in certain segments, the real estate market was overheated pre-Covid,” explains Ian Casolani, Managing Director of Belair Property. “The market needed to be more realistic, and we were already seeing price corrections before the pandemic hit. What we’ll see now is the market continuing to settle.”
“In certain sectors, property prices will continue to level out and become more affordable. An optimistic view would be that COVID-19 is correcting property prices, bringing them closer to a property’s real value. At the end of the day, the price of the property is what people are prepared to pay for it. This is why, when investing, we say it is all about ‘location, location, location’, because in top locations there is always healthy demand vs supply. As a result, these properties tend to keep their value, even when the rest are levelling out or, in some areas, dropping.”
With almost half of the survey’s respondents showing scepticism about the Maltese economy recovering in less than a year, this kind of affordability is at the forefront of strategic investment decisions in property. “Malta’s rate of recovery is evidently a debatable point, but it’s clear that people don’t expect it to be quick,” Mr Casolani continues.
The role played by banks in the property market has been a hot topic over recent months. The survey reveals that 68 per cent of respondents feel their bank has not supported them enough during the crisis, and 43 per cent believe banks should establish a COVID-19 credit policy.
“Banks have been helpful from the start of the pandemic by, for example, launching beneficial measures regarding mortgage repayments,” explains Edward Grech, a former banker and consultant. “However, given the responses to the survey, the message may not have come across to the general public. This may be because banks have been reluctant to reduce fees and interest further because, after all, that is a bank’s primary source of income.
“During the COVID-19 period, people have sought less help from banks. For example, requests for home loans have dropped by about 40 per cent. The government’s incentives for first-time buyers and buyers for investment and rental purposes will likely see this downward trend reversed. But there remains a lot of uncertainty, as we can see from the survey’s results.”
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