Letter to the Editor - The Times of Malta
Tuesday, April 19, 2011, by John Hollamby, St Julians
Lack of meaningful statistics on property
There is a huge investment in property development, house and apartment ownership, mortgage investment etc. in Malta.
It follows therefore that there should be first-class analysis of trends in values, numbers of transactions and other important matters such as the number of vacant properties forming developers’ land banks, vacant new build property and no doubt many other critical pieces of information to enable the state as well as investors, would-be purchasers and sellers, mortgage providers and so on to make their decisions on a basis of reliable information.
However, the only published statistics, so far as I can see, is an analysis based on the number of properties being advertised and the asking prices. It is a fact of life that estate agents everywhere almost invariably suggest inflated prices in the hope of selling to an uninformed purchaser and also to attempt to “talk up the market” rather than give realistic advice or admit that there is a depression in the market. It follows therefore that this basis for statistics is fundamentally flawed. That a government department and the public should have to rely on such erroneous information beggars belief.
Surely it is possible, and indeed essential, for the National Statistics Office to provide the accurate and reliable information that is so sorely needed. Every property transaction has to be registered with the tax authorities and the Land Registry and so meaningful statistics are capable of being provided. Instead of this we have no accurate information on the number of vacant, old or new build properties there are, nor accurate valuation data on which the would-be purchaser, adviser, speculator, bank or other lending/investing concern can rely.
These should include the number of transactions registered and the prices achieved preferably broken down to show the type of property and the price per square metre. Information is also needed based on these facts to show whether the number of transactions is rising or falling as compared with like periods in previous months and years.
The collapse of the economies in other countries has, all too often, been the result of over lending and borrowing and ill-advised over optimism on the part of banks and other lenders with horrendous results.
This appears to be a very real risk in Malta where, for example, banks are not only speculating by taking part in developments but also by lending to purchasers and indeed also encouraging people to borrow to buy second or holiday homes. Whether or not the banks have substantial sums invested in many of those developments by way of equity investment as well as funding I do not know, but it seems highly probable. I did note that BoV had a 10 per cent share in the redevelopment of Manoel Island as an example. The apparent lack of meaningful statistics means that many transactions are taking place without any useful information and surely this is something that the NSO should be providing and indeed should have been providing for many years past.
One only has to see the mess that the Irish government allowed to be created to realise that Malta is running the risk of putting us in the same situation.
In the UK and no doubt in many other countries detailed information on all property transactions are readily available on the government’s website so that, for example, one can see what sales have taken place on any property or in the whole of a street in recent years and indeed up to the minute facts.
As a partner for over 30 years in one of the largest firms of valuers and estate agents in the UK I am only too well aware of the fact that property prices can rise and fall in accord with national and world economies and it is a matter of great concern that the Maltese are being kept misinformed and still being given the delusion that Malta is not subject to this fundamental fact of economics.
Over a month ago I sent an e-mail to the NSO in much these terms and despite sending a reminder two weeks ago I have yet to receive a reply.
Read the original letter here.
Lack of meaningful statistics on property
There is a huge investment in property development, house and apartment ownership, mortgage investment etc. in Malta.
It follows therefore that there should be first-class analysis of trends in values, numbers of transactions and other important matters such as the number of vacant properties forming developers’ land banks, vacant new build property and no doubt many other critical pieces of information to enable the state as well as investors, would-be purchasers and sellers, mortgage providers and so on to make their decisions on a basis of reliable information.
However, the only published statistics, so far as I can see, is an analysis based on the number of properties being advertised and the asking prices. It is a fact of life that estate agents everywhere almost invariably suggest inflated prices in the hope of selling to an uninformed purchaser and also to attempt to “talk up the market” rather than give realistic advice or admit that there is a depression in the market. It follows therefore that this basis for statistics is fundamentally flawed. That a government department and the public should have to rely on such erroneous information beggars belief.
Surely it is possible, and indeed essential, for the National Statistics Office to provide the accurate and reliable information that is so sorely needed. Every property transaction has to be registered with the tax authorities and the Land Registry and so meaningful statistics are capable of being provided. Instead of this we have no accurate information on the number of vacant, old or new build properties there are, nor accurate valuation data on which the would-be purchaser, adviser, speculator, bank or other lending/investing concern can rely.
These should include the number of transactions registered and the prices achieved preferably broken down to show the type of property and the price per square metre. Information is also needed based on these facts to show whether the number of transactions is rising or falling as compared with like periods in previous months and years.
The collapse of the economies in other countries has, all too often, been the result of over lending and borrowing and ill-advised over optimism on the part of banks and other lenders with horrendous results.
This appears to be a very real risk in Malta where, for example, banks are not only speculating by taking part in developments but also by lending to purchasers and indeed also encouraging people to borrow to buy second or holiday homes. Whether or not the banks have substantial sums invested in many of those developments by way of equity investment as well as funding I do not know, but it seems highly probable. I did note that BoV had a 10 per cent share in the redevelopment of Manoel Island as an example. The apparent lack of meaningful statistics means that many transactions are taking place without any useful information and surely this is something that the NSO should be providing and indeed should have been providing for many years past.
One only has to see the mess that the Irish government allowed to be created to realise that Malta is running the risk of putting us in the same situation.
In the UK and no doubt in many other countries detailed information on all property transactions are readily available on the government’s website so that, for example, one can see what sales have taken place on any property or in the whole of a street in recent years and indeed up to the minute facts.
As a partner for over 30 years in one of the largest firms of valuers and estate agents in the UK I am only too well aware of the fact that property prices can rise and fall in accord with national and world economies and it is a matter of great concern that the Maltese are being kept misinformed and still being given the delusion that Malta is not subject to this fundamental fact of economics.
Over a month ago I sent an e-mail to the NSO in much these terms and despite sending a reminder two weeks ago I have yet to receive a reply.
Read the original letter here.
Hi Kenneth,
ReplyDeleteFully agree! In fact, i came across your blog when searching for such information. I am tired of listening to all sorts of industry truths that are utterly confusing. I want the real facts. What are property in Malta really selling for?`What are the market trends? No answers are available..
Anne, thanks for your comment. This past article of mine answers some of your questions http://maltaproperty.blogspot.com/p/malta-real-estate.html
ReplyDelete