Douglas Salt, Director, Frank Salt (Real Estate) Ltd, said there was “pent-up demand” and people now want to buy property. “At the moment, the property sales market is quite active,” he remarked.
Rentals were hit somewhat badly in the wake of COVID-19, especially in the case of short lets, which is also very popular among some tourists, the real estate agent continued. However, he cautioned that one must be realistic and not think that, as airports reopen, Malta will be flooded with tourists again overnight, or that demand will increase steeply, as a result.
This was also because foreigners who lost their job in Malta have returned home, leaving the apartments they rented vacant. Therefore, what will happen vis-à-vis the letting market depends very much on the recovery in tourism and how many foreigners will be working here permanently or in the long-term, he continued.
He would not hazard a guess on when the letting market could start stabilising, though he said one should be able to have a clearer picture by the end of July. He expressed the hope that Malta will be perceived as a safe destination by potential holidaymakers, apart from the fact that it can be reached by a short flight and it is blessed with sunny and warm weather. In terms of prices, he admitted he did not notice any significant changes, though he expressed hope these would level off.
“Price-wise, sales were overheating, so it would be good if these were to stabilise for a period, though one must bear in mind that property will always appreciate in value and, indeed, nobody would like to see property losing value. Still, it would be positive if the prices were to stabilise for a year or two,” Mr Salt asserted.
Looking back, in the case of rentals, it was clear from the outset that the increase in prices above what should have been the norm was temporary, resulting from a short supply and a high demand, with some making the best of it, he explained. What eventually happened, he added, was that, rather than taking two to three years for the situation to normalise, it occurred suddenly.
He acknowledged that quality and standards come at a price, and those who can afford to pay would continue to seek upmarket properties, which means pricing issues will always remain. “A balance must be struck between affordable housing and quality housing, and by quality one also means the infrastructure outside the house and not only the building itself,” Mr Salt maintained. In this regard, he said there was a new demand that must be met. Post-COVID-19, he pointed out, prospective buyers are insisting that units should have, at least, some outside space like, say, a garden or a terrace.
But, in the future, Mr Salt acknowledged that a lot of hard work and perseverance are needed to recover fully.
This is an extract of an article first carried in the June edition of The Malta Business Observer