Issue link: https://maltatoday.uberflip.com/i/1253597
7 maltatoday | SUNDAY • 31 MAY 2020 OPINION LAST Monday, the Times car- ried a front-page story to an- nounce that development ap- plications are down by nearly one-third. On Thursday, the same newspaper ran a full-page report to inform its readers that there were 'no significant chang- es in the price of property' as a result of the COVID-19 pan- demic. Both stories belie many mis- taken notions the media – and environmental NGOs – have about the construction and property market in Malta. This is amply demonstrat- ed by the fact that those who complained that construction work was not stopped during the pandemic never bothered to check how much money this would have cost the govern- ment – and the taxpayer – to subsidise the resulting large number of laid-off workers. If there is an economic sector that reflects the basic notion that supply is driven by de- mand, this is the property and construction sector. This is the result of the fact that there are no serious restraints for eco- nomic planning reasons on the sector – as opposed to re- straints for environmental and physical planning motivations. Most developers can gauge intuitively where the de- mand-supply situation of prop- erty is going while the media and environmental NGOs seem to be at a loss about property market trends. Basically, they cannot understand the fact that these trends are driven solely by market forces – the law of supply and demand – and try to attribute what happens in this sector to other reasons. The most 'fashionable' moti- vation touted in the media is that the sector is motivated by the 'greed' of developers. It is true that normally developers try to maximise the develop- ment potential of their sites – another market-driven trend. It is also true that there some who try to cut corners by ignor- ing basic rules of decency at the expense of the owners of prop- erties neighbouring their sites. This is where the general pub- lic's complaints on the industry are justified. Both the current and the previous PN adminis- trations have made laws, rules and regulations in an attempt to curb such abuses. Some progress can be reg- istered on this front, but the threat of financial punishment only does not seem to work with some. Many times it is ed- ucation and manners that are lacking. As regards the current state of the industry, it seems that developers continued on una- bated in the case of the devel- opment of projects that had already commenced before the pandemic; while marking time in the case of other projects that had only been lined up in 'the queue'. At the moment it seems to be a waiting game, with people postponing – rather than can- celling – property purchases that they had already opted for. The home ownership market has already been affected in the case of couples, who were tak- ing bank loans, now having to do with the loss of a substantial part of their income as a result of the pandemic. Now, they no longer qualify for the bank loans as had been calculated before the COVID-19 era. The number of foreign work- ers that have left or want to leave Malta is approximately equal to one year's increase of foreign workers in the pre-COVID economy. If af- ter the pandemic is over – or just legally declared to be so – the trend of annual increas- es in foreign workers returns to what it was, the pandemic would have only caused a blip in the property market and in the once booming rental mar- ket. The effect of the COVID pan- demic on the rental market is, in fact, the more serious aspect of the property market. Many landlords have had to reduce rents; as they preferred a re- duction in their income, rath- er than owning empty units. Will the level of rent go back to what it was? As regards commercial prem- ises, short/medium-term office rentals reportedly took up an increasing amount of the mar- ket share previously reserved for long-term lease commit- ments. Complaints by owners of re- tail outlets that they have to pay the rent for the period their establishment was closed by government regulation, are undoubtedly justified. Many think that the property sector will never be the same again. This is a moot point. The sector needed a bit of cooling down and if the COVID pan- demic ends up by doing just that, it will be actually bene- ficial. If the long-term conse- quences of the pandemic are more enduring, than the prop- erty market could be seriously affected. Again, much depends on whether the economic situa- tion will revert to what it was before the pandemic or other- wise... with an unknown 'new normal'. Football in the time of COVID The circumstances in which Floriana were declared this year's Malta Premier League champions were hardly nor- mal, and the satisfaction and joys of the fans is understand- able. Unfortunately, they threw caution to the winds when they publicly celebrated 'en masse'. No surprise that the Superin- tendent of Public Health, Pro- fessor Charmaine Gauci, said she was worried about what happened and asked anyone from among the throng and who develop symptoms to no- tify the authorities immediate- ly. The police were reported as intending to take action once they identify as many of those taking part as possible. The COVID-19 virus seems to have found an unlikely ally as a result of enthusiasm for football. The Champions League fix- ture between Liverpool and At- letico Madrid was the last ma- jor football game to be played in England before the coro- navirus shutdown. Many had called for the game to be post- poned, with Madrid already in a partial lockdown at the time, but it went ahead. There were 52,000 specta- tors at Anfield, including 3,000 traveling supporters from Ma- drid. The Spanish fans were al- lowed to travel to Anfield, even after Spain had closed schools and banned mass gatherings. The impact of Champions League matches on the corona- virus pandemic in Europe had already been demonstrated by Atalanta's February win over Valencia, a game that's now be- ing called 'Partita Zero' (Game Zero), and a 'biological bomb'. The match, which took place in Milan, is probably a major factor in the Bergamo region being one of the hardest hit by COVID-19 in Italy, with thou- sands of fans travelling from Valencia and exchanging the virus with supporters from It- aly. Michael Falzon Property and development after COVID-19 micfal45@gmail.com