Despite a degree of buoyancy in the property market, there is some concern, felt by local agencies, over the prospects for the months ahead.

Michael Bonello, Chief Executive Officer of Alliance, a newly formed real estate agency, considers the relaxation of the COVID-19 containment measures over summer as being “a very small window of opportunity” to launch the new brand.

He added that notwithstanding the current scenario, the launch was successful and staff and property advisors on the ground have been following all the guidelines and taking all the necessary precautions to ensure they protect themselves, their clients and the contacts they meet every day.

The CEO, however, acknowledged that, at times, there was some apprehension when it comes to home viewings, which, he said was “very understandable”, with every case being dealt with as necessary to ensure everyone is kept safe and comfortable.

As to the performance of the market itself, Mr Bonello pointed out that some revenue streams, such as speculative investments, buy-to-let and rental market properties in general, have been very seriously hit by COVID-19 and it remains to be seen how these will recover in the longer term.

He reported there was a substantial, albeit temporary, increase in sales demand for property during July and August, as the agency started catching up with the backlog of transactions that had stalled during the partial lockdown period, when notaries and banks were not operating as usual.

The lowered property tax introduced as part of Malta’s economic stimulus package had the desired effect of motivating buyers to conclude purchases sooner rather than later, thus also increasing demand, he continued.

“Right now, our property advisers are seeing a more buoyant mood among both buyers and sellers, with the general feeling being that we have been through the worst shocks of the pandemic crisis and, from now onwards, things are bound to continue getting better.

“Having said that, the increasing numbers of COVID-19 cases are now of some concern and we cannot really forecast where demand will go in the future,” the CEO asserted.

One major change being noticed, he went on, is that the agency is getting many more requests for properly considered professional appraisals. Whereas, before, some owners would determine prices based on their own hunches and then ‘bump them up’ a bit more to make some room for negotiation, now more and more owners are opting for services such as the agency’s Alliance Selected Package, in which a dedicated think tank of experienced agents appraises properties based on up to-the-day research and reliable knowledge of similar units, location, and so on, he explained.

At the same time, the agency is also noticing price reductions on properties that have been on the market for far too long.

“So there definitely is some visible market correction going on, especially where demand is lower than in other areas or where owner expectations were raised to unrealistic heights.

“The effects of the aid packages and bank moratoria tapering off in the coming weeks and months, remain to be seen.

“Motivated sellers may then be forced to reconsider their prices or accept lower offers – more so than before,” Mr Bonello pointed out.

He was quick to acknowledge that the sector never experienced anything like this before, meaning there are, still, many question marks about he reliability of any forecasts and assumptions.

What is certain, the CEO observed, is that, by now, many within the industry consider this new reality as a new way of life – one they just have to get used to. He noted that, as a company, Alliance is very fortunate to have launched its new brand at this time because the partial lockdown up to June gave it more time to focus and develop its brand with a built-in post-COVID19 mindset.

He mentioned examples to illustrate his point: prop-tech solutions, such as 360° scanning of properties and 3D viewing technology, enabling clients to tour properties remotely, are now standard procedure.

The agency has also built a very powerful database system and online presence, which it is constantly updating and enhancing, to be able to serve clients more effectively through digital media.

In the CEO’s view, the biggest challenge for all is overcoming their own fears of the unknown.

It is natural that all are concerned with the rising number of cases of infection, especially those who have vulnerable people in their families, Mr Bonello remarked.

Similar trends, he pointed out, are prevalent in many other countries around the world.

“By now, we must be resigned to the fact that this is the situation we are living in and the only very limited control one can have is to protect ourselves and those around us,” he advised.

Asked whether Government incentives are adequate or whether they need modifications, Mr Bonello replied: “Very substantial and effective incentives have been announced by the Government and it would be presumptuous of us to try and evaluate their adequacy for society at large.”

He pointed out that, since many of the people working in the industry are self-employed taxpayers, estate agents did not receive any wage supplements or direct support of any kind.

The property tax incentives pushed forward by the Malta Developers’ Association and adopted by the Government, did offer some respite because the market flourished, at least up till now, he continued, noting that, considering how badly some industries were hit, this is relatively good news for those working in real estate.

However, some people lost their livelihoods, some owners were forced to close down businesses and many are facing a very uncertain future, he pointed out.

“Eventually, the ripple effects of this economic fallout are bound to effect other industries, perhaps even ours. So, from that standpoint, we can claim that nothing is really adequate but, realistically, we do have so much to be grateful for,” Mr Bonello concluded.

This is an extract of a feature first carried in the September edition of The Malta Business Observer