Issue link: https://maltatoday.uberflip.com/i/720024
7 maltatoday, SUNDAY, 28 AUGUST 2016 News Property prices up by 67% since 2001, leaving average-wage earners behind TIM DIACONO PROPERTY prices have gone up by a significant 67.2% between 2001 and 2015 and show no sign of slow- ing down. The latest data from the Central Bank also shows that between the first quarter of 2016, and 2013 – since Labour was elected to power – property prices have already gone up by 24.8% in just three years. This compares with the 34.6% boost that took place between 2003 and 2008, when Malta became an EU member state in 2004 (prices skyrocketed by 20%in that year alone); and the price decrease by 0.2% between 2008 and 2013, effec- tively crowning the 'austerity' sea- son that spilled over from the rest of the EU. Since 2001, real estate value shot up by around 67.2% with the rise most pronounced for terraced houses, whose average price went up by 73.5%, and for townhouses, villas and houses of character, which witnessed a collective rise of 75.2%. The most significant moves in real estate value came in the wake of Malta's decision to join the Euro- pean Union in 2003 and in the time following Labour's return to govern- ment in 2013. Indeed, property shot up by 13.3% in 2003, by 20.3% in 2004 and by 9.8% in 2005. After a relative lull, punctuated by drops in value in 2008 (-2.7%) and 2009 (-5%) as a result of the global fi- nancial crisis, property prices picked up again in the first two full years under the incumbent Labour gov- ernment – by 7% in 2014 and 6.3% in 2015. The Central Bank's most recent figures show that property prices continued to soar this year – up by 6.6% in the first quarter of 2016, when compared to the same period last year. At an EY property conference ear- lier this year, 63% of the audience members voted in a straw poll that Malta's property market was "un- sustainable". Economist Marie Briguglio warned that Malta's property mar- ket cannot maintain its rise, as it has been affected by one-off events such as the asset repatriation programme, the sale of citizenship programme, and the high rate of skilled and low- skilled immigration to the island. Indeed, data recently tabled in Parliament shows that a total of €189.4 million in property was sold to foreign buyers, comprising a total of 280 units. That represents a mas- sive 167% jump over 2014, when 208 units were sold for a total of €70.7 million to foreign buyers. The huge rise was largely trig- gered by the Individual Investment Programme, which requires new citizens to invest at least €350,000 in property. "As it stands, we'll need to keep attracting more and more for- eigners to Malta to keep the prop- erty market sustainable," Briguglio told the EY conference. The Central Bank has also flagged a tax exemption scheme for first- buyers as a key factor behind this re- cent rise. Launched to allow people to save up to €5,000 in stamp duty when purchasing their first prop- erty, the recent rise in prices raises questions on whether the scheme is actually allowing first-time buyers to save money or merely fattening the pockets of property dealers. Malta Developers' Association president Sandro Chetcuti has dis- missed warnings that the property market is a bubble about to burst, arguing that property remains the most solid investment on the island. However, he has called for the pub- lication of selling prices of land and properties on a location-by-location basis, so that inflation can be better monitored. What property can an average salary buy you? Malta's home ownership remains particularly high – with the most recent Eurostat figures placing it at 80%, compared to the EU average of 70.1%. However, there is growing con- cern that the property market is pricing more and more people out of buying their own home. Indeed, the steep rise in real estate value over the past 14 years has not been balanced by similar gains in people's salaries. National statistics show that the average salary on the island only in- creased by 42.8% between 2001 and 2015 – from €11,443 to €16,882. The 15.4% rise in property value be- tween 2013 and 2015 has only been countered by an 8.87% increase in the average national salary. HSBC's online home loan calcula- tor shows that the bank will lend a 30-year old buyer on an average sal- ary between €67,500 and €101,000 to buy a house, assuming no other monthly financial commitments. A quick glance at the Classifieds sec- tion in the last week's issue of the Sunday Times of Malta newspaper makes it clear that this loan would be well out of range of most of the advertised properties for sale on the island. Indeed, out of 429 advertised properties, only 28 fall within that category – the majority of which are located in the south-east and north- west of Malta and on Gozo. Only six were listed as available in the centre of the island – a house of character in Birkirkara, a ground-floor mai- sonette in Hamrun, two apartments in Msida, an unconverted town- house in Qormi, and an apartment in Pieta. The popular north-east region appears all but inaccessible for an average-income earner relying solely on a bank loan, with a search on the websites of five main real es- tate agencies on the island (Remax, Perry, Dhalia, Frank Salt and Simon Mamo) only revealing five available properties in that region – a town- house in Sliema, a ground-floor maisonette in St Julian's, and three one-bedroom apartments in Sliema, Gzira and San Gwann, and a town- house in Sliema. Year Price Index Annual % change 2000 100.0 2001 105.1 5.1% 2002 114.2 8.7% 2003 129.3 13.3% 2004 155.6 20.3% 2005 170.9 9.8% 2006 177.0 3.5% 2007 178.9 1.1% 2008 174.1 -2.7% 2009 165.3 -5.0% 2010 167.1 1.1% 2011 169.3 1.3% 2012 170.1 0.5% 2013 173.7 2.1% 2014 185.7 7.0% 2015 197.4 6.3% 2016 212.3 7.5% The 15.4% rise in property value between 2013 and 2015 has only been countered by an 8.87% increase in average national salary MATTHEW VELLA IVAN Grech Mintoff, a right-wing conserv- ative who in 2014 unsuccessfully contested the European elections, is claiming to have "more evidence" in hand as to an alleged medical visa scam. Grech Mintoff, self-styled chairman of the minuscule eurosceptic formation Alleanza Bidla, was catapulted into the limelight af- ter police investigators said they had no conclusive evidence to arraign Neville Gafà, an official of the health ministry, on bribery charges. According to Libyan national Khaled Ben Nasan, Gafà would have pocketed some €150,000 a month to issue medical visas to Libyan nationals – allegations his lawyer, Leslie Cuschieri, sent in writing to then health minister Konrad Mizzi in April 2016. Ben Nasan, a Libyan import-export trader, had back in 2014 claimed to have played the part of interlocutor with militiamen who had kidnapped Martin Galea outside Trip- oli, Libya. The claims were reported by Mal- taToday but never reliably confirmed. That a police investigation has found noth- ing with what to conclusively arraign Gafà, a man close to the government's top brass, has rankled those who criticise the government of exerting undue influence on the institu- tions. Grech Mintoff on Friday called a press conference, confidently announcing that Libyan army and government top brass would be willing to testify as to the way vi- sas are issued by the Maltese government, evidence of which he had been "shown" by way of receipts, footage, voice recordings, Viber screenshots and other documents that would confirm the alleged bribery. Some of those Viber screenshots were published in the Malta Independent. In painting a larger-than-life picture of his politician's role, Grech Mintoff said Ben Nasan was ignored by both government and the Opposition, until he met the Alleanza Bidla leader. And since news broke of the fruitless police investigation, Grech Mint- off claims the Nationalists "jumped on the bandwagon to score political points" by tak- ing to task the Labour government over the medical visa investigation. After his press conference on Friday af- ternoon, at 3:38pm the police called Grech Mintoff to submit any information he had in hand. But Grech Mintoff decided against going to the police, ostensibly because MaltaTo- day had been "fed sensitive information" by publishing the inconsequential news that the police had taken an interest in Grech Mintoff's allegations, which it reported that day at 4:40pm. On legal advice, Grech Mintoff decided to drop in at the police HQ and this time praised the police force, saying he was "con- vinced they are doing diligent work" but claimed that they were under political pres- sure. When MaltaToday spoke to him yesterday, Grech Mintoff demanded the newspaper re- veal its source as to how it was informed that police had spoken to him. When the news- paper refused - leaks are par for the course in this business - Grech Mintoff said he would not speak to the journalist. From then onwards, Grech Mintoff said he would not share any information with the police, but broadcast what he knows on the programme Exodus, a programme he and another Alleanza Bidla figurehead – Antho- ny Calleja – present on F-Living TV. "If I were now to divulge anything very se- rious to the police, will it also end up in the media of the progressive liberals like Malta- Today? I hereby urge the investigating of- ficers to investigate this leak to the press so that confidence from my side in the police may be restored," Grech Mintoff thundered in a statement yesterday evening. On his part, the health ministry official, Neville Gafà, has claimed he will sue The Malta Independent and Opposition leader Simon Busuttil over a report and other claims that were made since news broke that police were closing investigations on the bribery allegations. His lawyer, the former police commission- er Peter Paul Zammit, reiterated that Gafà "never received any monies in any way or manner" aside from his government salary. According to Ben Nasan's allegations, re- ported in the Malta Independent, Gafà was said to have "personally made between €2 million and €3 million from the racket since it began operating in 2014". Ben Nasan claimed that Gafà had started a new medical visa application process through which Libyans would send over their passports in advance, and Gafà would charge varying prices for the courtesy. Adding yet more flavour to the story was some cloak-and-dagger accusations from Gafà himself, who claims the allegations originally stem from an "anonymous high- ranking Libyan secret service officer" – if not the whistleblower Ben Nasan, then some client he represents. Gafà said that under a memorandum be- tween both countries, a medical visa for a person injured in the Libyan conflict had to be first reviewed by the Libyan authorities, and then screened by the Malta Security Service, police, immigration and medical departments as agreed between both gov- ernments. "All expenses as regards the pa- tient are entered into a government account as debt is subsequently settled by the Libyan authorities. No fees or charges were levied by myself or the respective departments for the vetting of the persons concerned," Gafà said. But Gafà had been featured in screenshots of Viber chats as having entertained a de- mand by Ben Nasan to meet and settle the return of some €38,000 after some medical visas to various Libyans did not transpire. While the chats and their contents raise suspicion about Gafà's relationship with the whistleblower – for the civil servant was clearly on more than professional terms with him – Gafà alleges the Viber chats show Ben Nasan was a sort of middleman collecting monies from others "on the unfounded pre- text of having Libyan or Maltese clearance." Ben Nasan also showed Grech Mintoff the chats and voice recordings, leading the Alleanza Bidla figurehead to hold his own press conference on Friday and claim they were "just the tip of the iceberg". Eurosceptics vow to blow top off medical visa 'scandal'