Issue link: https://maltatoday.uberflip.com/i/1013924
7 maltatoday | SUNDAY • 12 AUGUST 2018 PAUL COCKS ONE of Malta's market leaders in the rental market is insist- ing there is no property bubble, saying rental prices in 2017 and 2018 have remained stable. Steve Mercieca, co-founder and partner at QuickLets, told MaltaToday that rental prices have only increased in the last years as they started reflecting the real value of property in high demand. Mercieca was reacting to a report last Sunday that showed Maltese households had seen their income from rentals boosted by over 132% over three years, to €85 million in 2017. "For many years rent values were very low when compared to what Maltese localities had to offer. As demand rose and more rental properties were made available, the prices started rising, plateauing at the end of 2017 and remaining sta- ble since then," Mercieca said. "Back in 2013, you could rent a one-bedroom apartment in Sliema for €350 per month, an attractive rate for the tenant but one that did not reflect the true market value. As Malta's image and economy improved, rental prices started to go up to their actual value. Since the end of 2017 and all through 2018, rental rates have not con- tinued to rise. Is this the sign of a bubble? I don't believe so." Data released by the National Statistics Office has revealed that households made €85.8 million by renting out property in 2017, a 132% increase over 2014, when only €36.9 million was registered as income from rent. The statistics do not give a breakdown on the number of households that are benefitting from the accelerating rental market but economist Philip von Brockdorff said the figures suggested the increase was also due to more people renting out their own property. "Rents have increased, which contrib- utes to the larger amount re- corded by the NSO but there is also a phenomenon of more people renting out idle prop- erty they owned, such as sum- mer homes, and others who have bought apartments to rent them out," Brockdorff said. Mercieca agreed, saying that for many years property own- ers had not bothered to list their vacant properties for rent, since the income was so low. Things have changed indeed. "Malta has created an image that has attracted many people from all over the world, even through the likes of Instagram, AirBnB, Facebook as well as portals like Booking.com. With social media favourites like LAD Bible or Nas Daily mak- ing multiple videos on Malta, each receiving up to 1.3 million views, many foreigners had come to learn about and appre- ciate Malta for the first time," Mercieca says. And that also includes attrac- tive tax rates and opportunities for foreigners to live and work in Malta – factors Mercieca says have "turbo-charged" the Maltese economy. Even property veteran Francis Spiteri Paris of Perry Real Estate says that there was never a time like this that Maltese homeown- ers were putting up their prop- erty for rent in such numbers. "That is because demand for rental properties remains high, but also because property own- ers are coming to realise it is now worth it to put their prop- erties up for rent, since prices are now reflecting their true market value," he said. Spiteri Paris said new owners renting out property included those with only one or two properties to let. "We are also seeing a marked increase in the number of people who are buying property with the sole intent of renting it out for ad- ditional income," he said. Mercieca says that only a handful of investors own a cou- ple of hundred of properties while the rest of the market is now small players who invested in one rental investment back in 2015 and are now looking at a second investment. "To put some figures in numbers, over the past five years our team has managed to put together a data- base of 11,000 owners, who to- gether own 28,000 properties." Mercieca says the buy-to-rent phenomenon now constitutes over 50% of QuickLets' busi- ness. And finding the right property to list, one that would be rented out quickly, was not as easy as some people think. "Most of our team and Zanzi Homes focus on finding bar- gains. That's how they are trained and that's what they are great at," he said. "They spend countless hours every week calling hundreds of people and seeing a minimum of 90 prop- erties per month. From those 90, they pick five which nor- mally sell within a week." And the age of the typi- cal homeowner is also slowly changing. "While many of the owners with more properties tended to be older, people buying prop- erty to rent out today tended to be in their 30s," Mercieca said. "I would put the average age of property owners at 45." NEWS Letter of Intention Mr. Philippe Gatt and Mr. John Borg Olivier, directors, declare their intention for the company to register for an Employment Agency licence in accordance to article 23 of the Employment and Training Services Act, 1990 (Act XXVIII of 1990). e activities proposed to be carried out are the following: 1) Recruitment Consultancy; 2) Interviewing, selection and placements of can- didates in employment ; 3) Recruitment of persons from abroad to employment in Malta or in an EU member state ; 5) Advertising of the lling of vacancies; 6) Keeping a register of applicants for employment Ocial Registered Oce Address. e ocial registered oce Address of the premises at which the employment agency or employment business is to be carried out is: HR Sourcing Limited Oce 7, Leopardi Buildings Triq Tal-Balal San Gwann SGN 9016 Company Registration Number: C86362 Rental market leader says prices are stable With household income from rent rising to over €85 million in 2017, new trends and patterns have become apparent with a marked increase in buy-to- rent investment as well as the number of one- and two-unit owners