In a recent debate on real estate, Dr. Lawrence Gonzi surprised everyone by admitting We had schemes for people to direct funds invested abroad to Malta but in hindsight I can say that many of these funds went to property. A result of the schemes we introduced led to an over-supply of property." This is confirmed in the latest census results (Census 2005 Volume 2, Dwellings*), and echoes the concern repeatedly voiced by our group, Flimkien għal Ambjent Aħjar that, in spite of being swept under the carpet, the problem of the tens of thousands of vacant properties on our island is a very real issue.
An article which subsequently appeared in The Times Business Supplement of the 2nd November 2007 also commented on these same results, however attempted to diminish the gravity of the situation by perpetuating a number of myths. In claiming that a great number of these vacant units are uninhabitable, Architect Alfred Briffa seems to have overlooked the statistics that show that out of 53,136 vacant dwellings only 4,824 are in need of serious repairs or dilapidated while 10,028 are holiday homes. Therefore, we are left with a massive 38,284 vacant properties that are sound and habitable, 4,555 of which are located in Sliema and St. Julians alone.
His further claim that there is no demand for village core properties is equally erroneous. The number of young couples buying property in village cores is borne out by the flood of applications to convert old Urban Conservation Area houses. Likewise, Floriana is following in the footsteps of Valletta, with young people showing a growing interest in residing within these historic towns.
Architect Briffa confirmation that: "These investors would be prepared to overlook the type of development and its intrinsic design, so long as it could accommodate a certain number of properties," clearly highlights the current mentality that FAA is trying to combat, primarily that of quality sacrificed to quantity.
While it is true that well-built and well-priced properties ensure better sales prospects, it is equally true that upscale, lifestyle projects cater to a very limited market while the number of such mega-projects has multiplied to the point that soon even this niche will be saturated.
Ultimately, the responsibility for this situation rests with the Malta Environment and Planning Authority. While MEPA environmental performance is far from brilliant, this glut of vacant dwelling units confirms one of two things: either that its planning capability is no better or that MEPA’s planners are not being allowed to do their job. Decisions to raise building heights all over Malta, while at the same time opening the countryside to development and encouraging high-rises were totally uncalled for. Taken together these have ruined the face of Malta towns and villages, threatened more countryside and impacted Malta’s historic vistas.
In spite of being well aware of this glut, in 2005 and 2006 MEPA forged ahead and approved the building of almost 20,000 new dwellings which do not figure in the census. If one conservatively estimates that just half of these have not been sold yet, the real figure of vacant dwellings could be as high as 63,000 empty homes! How can MEPA justify the continued issuing of permits at this rate, which can only be explained by the pressure to enrich developers? In any other country, an honest and transparent investigation of the decision-making processes and the decision-takers would be carried out to ensure that MEPA would operate in the best interests of the citizens who – through their taxes – are paying for its existence.
In this context, a debate should naturally ensue on why and how financial institutions grant loans in an over-supplied market. FAA augurs that the Government carefully considers introducing a serious super-tax on banks' profits, which could be used to finance heritage and regeneration projects. In spite of their much-vaunted Corporate Social Responsibility (CSR) policies, banks are missing the opportunities which their growing depositor funds could be used for – such as in the financing of venture capital initiatives and projects promoting renewable energy and sustainable development.
Finally, FAA also invites the Archbishop's Curia to take a leadership role by realigning its bank to these modern and more transparent commercial practices and by expressing its public opinion in the light of the thousands of properties which it has passed to the State and which are – until now – still lost in the limbo of the Joint Office.