Construction developers agree on revolutionary code of ethics

The Malta Developers Association has issued a code of ethics to be enforced by a regulatory board which will usher a revolutionary change in the behaviour of building contractors.

A code of ethics issued by the Malta Developers Association binds its members to comply with all applicable laws, including tax laws, civil law obligations, and environmental regulations.

The code, the first of its kind for the notorious construction lobby, is a revolutionary culture change from practices involving the illegal development of entire buildings which are only sanctioned by MEPA

The new code of ethics also defends the consumer from misleading property descriptions, and misleading advertising.

Members are forbidden from asking potential buyers to sign binding preliminary purchase agreements without giving them reasonable opportunity to reflect on the contract and to obtain legal advice.


And significantly developers are not allowed to enter into a promise of sale of property which is not covered by a full MEPA permit, unless potential purchasers are clearly informed of this.

Developers are also expected to respect third party rights by showing “due respect to the rights of owners and or occupiers of properties neighbouring sites that they develop or intend to develop”.

And rather than maximise the number of apartments in every nook and cranny members are expected to build apartments which provide “adequate living space.”

And developers are also made responsible for the actions of their contractors and employees when it comes to health and safety regulations.

The MDA has also set up an institutional framework to enforce the regulations. The Association is to nominate a Disciplinary Board consisting of a Chairman and two independent members, who are not MDA members. Complaints that a member has not acted in accordance with the Code of Ethics will be referred to this Disciplinary Board. A member will be liable to immediate expulsion from the MDA if the member fails to rectify his or her position if found in default of the Code of Ethics.

Click here to visit the original article on MaltaToday.

BOV passes EU stress test but faces judicial protest from property fund investors.

170 investors file new judicial protest against Bank of Valletta over property fund

Investors say BOV did not respect its own investment restrictions when it chose the investments for its property fund.

Bank of Valletta are facing renewed claims of having overlooked serious shortcomings in a property fund once valued in excess of €84 million, and which today has been depleted by major losses to the €30 million – of which only half are liquid.

This is the second judicial protest filed by a group of investors, after another firm, Finco Treasury Management, first filed a protest on 4th July in respect of 72 investors registered in its name. Now the new claims have intensified pressure on Bank of Valletta to answer to accusations that it invested money without the necessary due diligence.

The Multi-Manager Property Fund, which is managed by Valletta Fund Management, itself owned jointly by BOV and Insight, invested money in what should have been the best pick of real estate property funds from around the world.

The fund was portrayed as ‘a low-risk fund with low volatility’, giving good returns even when bonds or equities do badly. But the 170 investors say their investments have been reduced to less than 25% of their initial investment.

Read the full article on MaltaToday.

Bank of Valletta selected for EU stress test

Bank of Valletta has been selected for stress tests by the European Union.

According to the Committee of European Banking Supervisors "the stress testing exercise does not provide forecasts of expected outcomes, but rather a what-if analysis aimed at supporting the supervisory assessment of the adequacy of capital of European banks."

The resulting perception from analysis of such a result, is significant for the local property market given Bank of Valletta's popularity as a loan provider for local businesses and property developers.

The Villa Madama auction

Something is clearly amiss. A landmark property has just gone under the hammer, selling at an unbelievable price when compared to other properties. But here's the quandary. Can such a property be benchmarked at all?

My starting point is pretty basic. How many upmarket apartments can be bartered for this well maintained landmark property of historical value located next door to the President of Malta's palace?The shocking answer seems to indicate not even two.

No excavations and demolition works in summer - MRRA

The Ministry for Resources and Rural Affairs (MRRA), has published a list of streets in Malta and Gozo, within touristic areas, wherein no excavation or demolition works will be allowed between 15 June and 30th September 2010. The tourist areas are those defined by the Malta Tourism Authority (MTA). The ban also includes all of Comino.
Click here for the street list as published by MRRA.

Salubrious Thoughts (2)

There are three major and recurring headaches here in Malta.

First on the list is a lagging tourism industry, certainly not entirely due to the global recession. A lot is still lacking from MTA (Malta Tourism Authority), most especially in upkeeping the discipline within its ranks. 


One need only drive past the St. Andrew’s Coast road, past Bugibba and Xemxija to witness the number of hoteliers who simply closed shop, abandoned ship and stripped their hotels to mere and unsightly frames, leaving the shell form skeletons to fester along the main routes, some of them for years on end. Forum Hotel, White Rocks Complex, Xemxija Bay Hotel and Mistra Village Complex are a few that come to mind.

Property in Malta - Google Insight trend line

Malta property prices - Central Bank quarterly review 2010

Earlier today 10th June, the Central Bank of Malta released its 1st. Quarterly Review for 2010, analysing the economic and financial developments for Q4 2009 and Q1 2010. Of particular importance to us ofcourse, is the snapshot this provides of the property market during this period.

The Central Bank's residential price index is based upon the advertised residential property prices compiled monthly from newspaper adverts. Therefore this report has to be interpreted together with the National Statistics Office (NSO) Quarterly report, which is published separately and which compiles monthly information drawn from contracts of sale registered with the Inland Revenue Department. However the latest NSO quarterly report is for Q1 2009.

Further analysis is also required to interpret Chart 2 within the CBM Q1 2010 report, which plots the annual percentage change in residential prices by category, with percentage change on the y-axis and the time period spanning Q1 2007 to Q4 2009 on the x-axis. The various property categories are colour coded, however both the Apartments and the Maisonettes trend lines do not differentiate between the performance of shell form and finished units. A further point to be considered is whether the term maisonette is specifying the original concept of a property in a block of two or three similair properties with indpendent entrances, or the later devolution including a groundfloor apartment underlying an apartment block, but with a separate private entrance.

Sliema, summer and surf!

Summer's in the air. Blue sky, slight breeze, and the mercury thread hitting 23 degrees Celsius.

We had a couple of overnight showers last week, but early yesterday morning the local council had some workers spread along the Sliema coast, bolting swim-ladders to the Tower Road foreshore; and that means a thumbs-up for the swimming season to open in earnest. 


The stretch of shore beneath the Tower Road promenade is just the place for sunbathing in Sliema. A flat limestone stretch punctuated at comfortably distant intervals with low sometimes circular natural rock basins perfect for a beach-towel and a comfortable lie-back; but the water's edge by comparison makes for some tricky manouvering and the best method by far to go down for a dip is via one of the several swim-ladders dotting this part of the coast in summer.

Banks in Malta may need to reassess their dividend policies

"Combined with the probable introduction of more stringent capital and liquidity requirements in the period ahead and the likely pressure on profitability deriving from an unfavourable economic conjuncture, the expected increase in credit risk suggests that the banks may need to reassess their dividend policies in order to be able to support a commensurate amount of capital."

The Governor of the Central Bank, Michael C. Bonello, made the above comment in his statement introducing the Financial Stability Report 2009, published earlier today by the Central Bank of Malta.

"Against this background of heightened instability and risk, the proposals currently under study to strengthen regulatory regimes, and in particular those of the Basel Committee designed to increase the resilience of banks through the adoption of stricter capital and liquidity regulations, assume particular relevance. Their early implementation is now becoming a matter of urgency" he went on to say.

The selected institutions for this financial stability analysis were:

APS Bank Ltd
Banif Bank (Malta) plc
Bank of Valletta plc
Bawag Malta Bank Ltd
HSBC Bank Malta plc
Lombard Bank Malta plc
Volksbank Malta Ltd


The full report can be read here.

Malta Housing Authority properties out for sale

The Housing Authority is subsidising the sale of over a hundred apartments, garages and nine maisonettes, spread over a number of localities; however no further information is currently available on the authority's website.

Meanwhile, The Times of Malta is reporting the expected average price for a 3 bedroom apartment to be €83,000 while a 3 bedroom maisonette will fetch in the region of €92,000. There is no specification as to whether these prices are for the shell form, advanced shell, or finished product.

Current property sales will now have to vie with these benchmarks when competing for first time buyers on the Maltese property market. Already, many are questioning the rationale of building further units on this island, when a large percentage of Maltese properties are lying vacant.

Update 25th May 2010

The Housing Authority is extending the closing date for applications for the sale of government apartments and maisonettes up to June 11.

Fort Cambridge and its environs

GAP Developments plc's latest project, Fort Cambridge, "has won the accolades" in the first Russian Home Overseas Property Awards, we are informed.

Without going into the merits of the design since I often admire a piece of architecture but totally disagree with its location and context, it is in fact the latter which alienates me to this project.

The Fort Cambridge project started off on a wrong foot while still on the drawing board, incensing the local residents' associations when the Malta Environment and Planning Authority issued permits for the development, dismissing the need for an Environment Impact Assement to be carried out. This was followed by further uproar from the Sliema Local Council, several environment NGOs and some political parties. At this point the NGO Flimkien ghal Ambjent Ahjar (FAA) contacted the EU which, on reviewing the case, ruled that an EIA had to be carried out, which forced MEPA to stand down from its previous position and ask the developer to conduct the EIA. The experts were paid out of the developer's pocket of course, and the green light given in a record couple of weeks; at which point the EU washed its hands of the issue.

One step beyond?

The newspapers this morning, report a gang of youngsters ambushing other young passers-by on the Gzira-Sliema stretch.

This particular area of Gzira has always struggled with two festering sores; primarily the notorious red light district around Testaferrata Street, a bustling commercial centre by day, and a vacuous downtown by night, and then there's the stretch of public garden running along the marina seafront and around to Manoel Island. Insufficient lighting, the proximity to the red-light district, and a number of off-duty foreign yacht crews tossed in for good measure, are a good recipe for trouble. Manoel Island is currently undergoing transformation and development, but large swathes of the islet are in pitch black darkness by night. Nothing one watchman and a car barrier can solve.

And so we reap the latest crop of teenagers born and "bred" in these inept environs. Admittedly, this particular stretch has it's fine share of upmarket seafront apartments 'valued' in the region of quarter of a million euros each. But the latest and upcoming developments are incrasingly gated and closed, advertising security, seclusion, and exclusion from the public in general.

But how Maltese is that?

Malta's Toxic Real Estate

I clearly remember the double retake I registered close to twenty years back, when as a young estate agent still breaking the ice in the business, I discovered that some of the highest priced property on the island was located within a couple of kilometres radius and in clear sight of Malta's prime toxic dump - Maghtab.

Facts and figures were hard to come by back then, and further questions from my part elicited many a disapproving look. But this morning I ran across the truth in black and white thanks to Cynthia Busuttil from The Times of Malta.

Here they are published in the papers, today 23rd April 2010.

• €30 million in EU funds will be used to turn the Magħtab, Sant'Antnin and Qortin dumps into leisure areas.

• Eighty per cent of the gases that come out of the Magħtab dump are toxic, the other 20 per cent is methane, being used to operate the regenerative thermal oxidiser.

• Almost 20 million tonnes of waste were dumped in Magħtab since the 1970s. Some 22.6 million tonnes of waste were deposited in 10 dumps since the 1960s.

• The 400 steel wells capture 6,000 cubic metres of gases every hour, with 40 million cubic metres being collected and treated every year.

Up until a few years ago, open fires raging across the Maghtab dump were a common sight. The resulting toxic smoke enveloped the coast road, and the stench carried across the landscape permeating the Bahar ic-Caghaq, Madliena and Gharghur residences, going as far as Bugibba, Qawra and Wardija depending on the wind direction.

Finally, a truly unbelievable situation is coming to an end, notwithstanding gases will keep on being extracted for the next two decades. And they say real estate prices depend on location.

References/Links:

Times of Malta article (23 April 2010) - Limestone-compost mixture will seal Magħtab dump

https://docs.google.com/fileview?id=0Bwc65hbqw_UbOTYxY2QyNGYtOTdjZC00MmQ5LTllNTQtNzgxYTI1Njk2YWNk&hl=en_GB

Link to Scott Wilson Projects - Malta Landfill Rehabilitation

http://www.scottwilson.com/projects/environment/waste__resource_management/malta_landfills_rehabilitation.aspx

Link to MaltaToday article (16 jan 2005) - For their eyes only

http://www.maltatoday.com.mt/2005/01/16/opinion2.html

Link to MaltaToday article (15 th July 2001) - Confirmed: Brain, heart and spine birth defects linked to landfills

http://www.maltatoday.com.mt/2001/0715/top1.html

Re: PQ on Maltese property sold to foreigners

In his latest reply to a PQ by Noel Farrugia (PL) with regards to property tax, the Hon Tonio Fenech, Minister of Finance, Economy and Investment, stated that it was not government policy “that foreigners are incentivised to purchase property in Malta.” The remark caused quite a stir in the Times of Malta readers’ comments below the report. But is this justified?

The current situation finds the Maltese islands with a surplus of 70,000 vacant properties. This figures when taking the National Satistics Office (NSO) 2005 Census report of 53,000 vacant properties, (of which, it might be pertinent to point out, only 15% were in need of significant repairs) and adding further permits for 40,000 units, authorized by the Malta Environment and Planning Authority (MEPA) since that date.

If one were to extrapolate further, a report commissioned by the construction industry and carried out by major auditors, concluded that if all the mega-projects presently applied for - Midi, Fort Cambridge, TownSquare, Metropolis, Pender Place, the Addolorata Tower, Xemxija Towers etc. - are finalised, the current vacant rate of 30% will climb to almost 50%.

Given these figures, the questions begging to be answered are:

1. Why indeed should Government incentivise foreign buyers when a market correction is certainly due given the staggering number of vacant properties on these islands?
2. Given that a number of people are looking at foreign property investors as a plug in the current gap between supply and demand, would it be healthy for such a large percentage of properties to be owned by speculators and investors who might dump their investments or even default overnight, as has in fact happened elsewhere in the Mediterranean last year?
3. With the value of property rentals already in negative territory when considered as a return on investment, what possible further use can there be for all this vacant property?
4. What are the revisions required to the above figures to factor in further land released for development by the recent rationalistion scheme?

PQs - Mhijiex policy tal-Gvern li persuni baranin jigu incentivati jixtru propjeta' f'Malta - Ministru tal-Finanzi, l-Ekonomija u Investimenti

Leġislatura XI Kategorija ORAL
Mistoqsija Numru: 15647 Data: 15/03/2010
Seduta: 206 - 19/04/2010 06:00 PM
Seduta Interim:
Titlu: TAXXA FUQ IL-PROPJETA'

L-Onorevoli NOEL FARRUGIA
staqsa lill-Onorevoli TONIO FENECH (Ministru tal-Finanzi, l-Ekonomija u Investiment):

Fid-dawl tal-fatt li f'Malta t-taxxa fuq il-proprjetà li tinxtara mill-barranin hija ta' 35% filwaqt li fi stati oħra fl-Unjoni Ewropeja tvarja bejn 18% u 20% bħal fil-każ tal-gżira ta' Ċipru, u b'detriment ta' dan Malta mhux qed tkun daqstant kompetittiva, jista' l-Ministru jara li din it-taxxa tiġi riveduta bil-għan li tiġi inċentivata u tissaħħaħ din l-industrija ħolistikament? Jekk fl-affermattiv, meta?


Tweġiba:

Ngħarraf lill-Onorevoli Interpellant li mhijiex policy tal-Gvern u lanqas fl-interess in ġenerali ta’ Malta li persuni barranin jiġu inċentivati biex jixtru propjetà f’Malta, kif qed ikun issuġġerit fil-mistoqsija parlamentari.

54,000 development applications in seven years - PQ reply

From the Times of Malta Friday, March 12, 2010
In the seven years between 2003 and 2009 the government received a total of 54,165 development applications.
Validations amounted to 49,020 while pending applications, including those suspended or inactive, totalled 5,145.
Prime Minister Lawrence Gonzi gave the information in reply to a parliamentary question by Labour MP Anthony Agius Decelis.

From the Parliamentary Question website:

Leġislatura	XI	Kategorija	ORAL
Mistoqsija Numru:	13312	Data:	30/11/2009
Seduta:	197 - 09/03/2010 06:00 PM
Seduta Interim:

Titlu:

Applikazzjonijiet pendenti għall-iżvilupp

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L-Onorevoli ANTHONY AGIUS DECELIS
staqsa lill-Onorevoli LAWRENCE GONZI (Prim Ministru):

Jista' l-Ministru jgħid kemm saru applikazzjonijiet għall-iżvilupp sena b'sena mill-2003 sal-2009? Kemm hemm minn dawn l-applikazzjonijiet għadhom jistennew li joħroġilhom il-permess?

---

Tweġiba:

Il-figuri mitluba jinsabu fit-tabella li qed inpoġġi fuq il-Mejda tal-Kamra.

Din l-informazzjoni hija miġbura mis-sistema tal-informatika tal-Awtorità ta’ Malta dwar l-Ambjent u l-Ippjanar u tinkludi l-First Decisions kollha inklużi applikazzjonijiet sospiżi u mhux attivi.

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Dokumenti annessi mal-mistoqsija:

Dokumenti mqiegħda fuq il-Mejda tal-Kamra:

Dokumenti annessi mar-risposta:

"Inter Vivos" Transfer of Maltese property, audit.

The Malta National Audit Office (NAO) has yesterday, March 01, 2010 published a performance audit titled: Inter Vivos Transfer of Property.

An Inter Vivos transfer of property is by definition an agreement between living persons, and not by a gift through a will.

The report analyses the validation and the collection of revenue due in respect of Inter Vivos Transfer of Property here in Malta. Conclusions presented in the report are based on data up to December 2008 and also outline actions and initiatives taken, or which are under the consideration, by the Capital Transfers Duty Department (CTDD).

The full report can be downloaded here.

CBM Quarterly Review - Property prices drop at slower rate

Residential property prices

The Central Bank of Malta’s index of advertised residential property prices declined by 2.5%,year-on-year, during the September quarter. Following a drop of 6.0% in the second quarter and 9.9% in the first, the third quarter’s relatively modest fall in the index appeared to indicate that the recent negative trend in property prices was reversing its course. Concurrently, the number of advertised properties -- a further indicator of supply conditions in the housing market dropped by 24.1%, following a 28.0% decline in the June quarter. Meanwhile, the number of building permits issued by the MEPA was down by 38.9%, year-on-year, in the third quarter.

Lower asking prices were reported in half of the eight categories covered in the Bank’s survey.
The largest contributors to the overall decline were flats in shell form and finished flats,with a fall in asking prices of 7.0% and 2.9%, respectively. These categories together make up more than half of the monitored properties.Reductions of 4.2% and 8.9% were also registered in asking prices of finished maisonettes and townhouses, respectively. On the other hand, demand for terraced houses appears to have remained buoyant as asking prices increased by 3.4%. This was also the case with houses of character, villas and maisonettes in shell form, whose prices rose by 5.6%, 4.0% and 5.6%,respectively.

Follow this link for a pdf download of the Central Bank of Malta Quarterly review Q4.

Malta Government Property Division signs bilateral agreement with Dubai Land Department.

The Malta Goverment Property Division (GPD), and the Dubai Land Department have signed a bilateral agreement valid for 1 year, which will give rise to a collaboration between both countries on technically related matters involving property registration and regulations. The agreement also covers training and an exchange of information.

The bilateral agreement was signed the last week of January 2010 by Parliamentary Secretariat Dr. Jason Azzopardi Azzopardi on behalf of Malta, in the presence of the Consul General of Malta in Dubai UAE, Mr. Anthony Tabone. Dr. Azzopardi said the Land Department was entering the international property scene exposing it to the best practices and systems used in different countries.

Sultan Bin Butti Bin Mejren signed the agreement for Dubai.