Issue link: https://maltatoday.uberflip.com/i/1111954
02.05.19 11 INTERVIEW and even debated [Malta Developers' As- sociation boss] Sandro Chetcuti on Xara- bank on the matter. e social aspect of the property market is very important for me. In terms of the government's role in this, the rent subsidy it offers has been in- creased, but I don't think this is the solu- tion. e government cannot control the private sector. So what can be done to prevent property prices from continuing to spiral upwards? Keep in mind that all economic progress has its aspects of regress. However, I be- lieve that all the talk about how the influx of foreigners is causing property costs to rise is actually leading property owners to keep pushing their prices up. What I think has to be done is for the developers and everyone else involved to stay calm and recognise that, if things keep going in this direction – ever climb- ing prices – the whole sector will freeze. What is worrying me is that if the mar- ket keeps heading in this direction – meaning that land prices keep rising and the developers and all others connected to the industry keep pushing them up too – we'll end up in a situation where the market freezes. And I see this freeze hap- pening in the next four years. Maltese people are struggling to buy a property. Today, a single person with a €25,000 annual salary struggles to pur- chase their own place to live. A one bed- room apartment in the south of the island costs around €150,000. Due to this of this, I am seeing cases where people enter into relationships of convenience. Single people come before me and complain that the bank would only give them a maximum home loan of €80,000, which isn't enough to buy a property, so they feel it would make more sense if they were in a relationship with someone to get a loan as a couple. Six months later, I'd see the same person coming over with someone else, as a cou- ple. But is this the solution? No. If people are getting into relationships of convenience to prevent paying rent and to get a loan, because they have no choice in this current climate, in a few years' time, this is going to cause an even bigger prob- lem in the country. So, what I am saying is: prices cannot keep rising. Maltese people have to re- main homeowners in their majority, or else they are going to end up at the mercy of capitalists who determine the price of property. is will end up being a worse problem for the government, because more people will be in situations of pov- erty or where they require social housing. In the past, social housing was meant for those who didn't manage their money wisely. Now the situation has changed… People who need social housing today in- clude those who are in employment, and while they might have limited incomes, they are not irresponsible people or spendthrifts. e reality here is changing. Do you believe we are on the road to a "bubble to bust" situation? If we are not careful, and Maltese people become no longer able to afford to own their own home, then we will have prob- lems. And this isn't something that de- pends on the government. It is everyone involved – landowners, property owners, developers and all others in the sector – who have a role to play to improve the outcome of this situation. Is it true that the prices of flats is now reaching a plateau, because there are many flats on the market, while the price of a townhouse will keep rising, because they are becoming rarer? Owning a flat is now commonplace, while ownership of a townhouse is now indeed becoming rare. Someone who owns a townhouse and a piece of land nowadays is rich without even knowing it. An average-sized plot of land in the south is worth around €400,000 today. One acre of land, which contains approxi- mately four plots, is worth around €2 mil- lion, depending on the locality. In central Malta, a 1,200 sq.m piece of land is worth €5,000,000. As an aside, this gives you an idea what the developer has to pay for land. So the blame can't be placed solely on the devel- oper for the rising prices. Developers are buying land at exaggerated prices, making it difficult for them to reduce their own prices. In terms of a plateau in flat prices in particular, I personally am not seeing this happening at the moment. But, I ac- knowledge that from last January, I have seen the property market prices in gener- al somewhat stabilise. e years 2015 to 2018 saw prices rise practically every month. Developers would call me from one month to the other saying that a particular property had risen in cost by €10,000 or €20,000. As from the start of 2019, I feel that pric- es have "calmed down", so to speak, but they still remain very high. Currently, a large finished three-bed- room apartment in the south would be sold for about €240,000, while in the cen- tral area it would go for €350,000. ere are places in Għarghur where a 145 sq.m flat, with no views whatsoever, would cost €420,000. What would you say is the most important thing if you want to be successful in this sector? Being successful in this job demands a lot of hard work. It's one of the toughest careers, because, while in other types of business, you would buy a product and then sell it, in our line, we have to find a property, which would not belong to us, and we'd them have to find clients to buy it. To be a real intermediary in this sector, it takes at least five years. Until you've been in it for five years, you're basically still a trainee. ere is a lot of hard work and long, long hours – in winter, forget the weekends, because most of the viewings are held on Saturday and Sunday mornings. You also have to always be honest and carry out a thorough inspection of the property which you are going to sell. You have to know everything about that prop- erty – its vendor has to be asked if they hired an architect, or if they've carried out public registry searches in the case of in- herited property to find out how and why the property was passed down, and so on. I don't want to have a client sign a promise of sale agreement, only for him to have to carry out €5,000 worth of public registry searches, and then ends up not even be- ing able to acquire the property when the search fails to confirm the family history behind the property's inheritance. is is the difference between being a salesperson and being a proper broker or intermediary. In this regard, I believe we need to train brokers through the setting up of specific courses at MCAST. We are dealing with the biggest investment people will carry out in their lifetime, and an untrained salesperson can end up misleading some- one. One may argue that people go to nota- ries if they want advice before selling or buying a property, but, in reality, they many times come to us first, and it is us who eventually advise them to visit a no- tary, especially about matters of taxation. erefore I am pushing for a school within MCAST to train people, at differ- ent levels, in the career of a broker. en, depending on the level of qualification acquired, that person would be able to practice as a broker, assuming duties up to that level, just as it works for other profes- sions. And the profession of estate agents and of sensara should require a license to practise. I would also insist that people who can't speak both Maltese and English aren't al- lowed to obtain such a license. We have many foreigners in real estate in Mal- ta who can't speak the languages of the country properly. It's also unfair that bank contracts for properties are drawn up solely in Eng- lish. It is true that English, like Maltese, is an official language of Malta, but certain people, especially the elderly, might not understand technical English, and end up signing a contract without understanding the clauses. So I think there should be changes in this regard. mcosta@mediatoday.com.mt ... not salesmen From the outset, I decided that I didn't want to employ people who had worked with other estate agencies – I wanted staff who were new, with a view towards training them to be proper sensara, not sales people