NEWS ARCHIVE

Thursday, December 2, 2004 - Fresh call for estate agents to form lobby group

Contact Person: Christopher Scicluna - THE TIMES BUSINESS

‘We need to get together to present the government with a packet of proposals on how to attract higher end foreigners to Malta as well as boosting the market for the average Maltese’

A FRESH call is being made for property dealers to form an active lobby group aimed at raising standards, introducing new practices and improving legislation.

“We need to get together to present the government with a packet of proposals on how to attract higher end foreigners to Malta as well as boosting the market for the average Maltese”, says Kevin Buttigieg, managing director of J&K Group.

The company ventured out into property sales only eight months ago, but it packs a strong punch, being backed by Remax, on of the largest real estate networks in the world.

The company has seen spectacular growth over the past few months. It moved into new offices in Sliema a few weeks ago and will open a Gozo office early in the new year. It has plans for two offices in the north and the south of Malta by the end of next year.

J&K had previously operated solely as a one stop shop for corporate services for companies coming to Malta, including the renting of accommodation.

While corporate clients remain its strongest market, the company is now increasingly handling property enquiries from individuals in Malta and abroad.

The Remax network is not serving just to attract potential buyers to Malta, however, as a “rapidly growing” number of Maltese are also buying property overseas.

“Most go to Italy, some have bought properties near ski resorts, and others are opting for emerging economies, like Croatia, where prices are set to rise steeply as economic growth accelerates.”

Mr. Buttigieg argued that attracting higher end property investors to Malta would not harm the supply of properties for average Maltese home buyers, but it would yield dividends for the country.

He felt that given the relatively large size of Maltese properties, the island’s attractions, as well as the limitations of space and population density, prices compared well with those of competing destinations, but some facilities here were seriously lacking.

“Some millionaires will pay anything for a property just to occasionally play in a quality golf course, and these people travel in groups” he said.

But, he complained, infrastructural services here, particularly the roads and the state of the environment, were not what these people expected. And while there were plenty of good quality apartments on the market, the supply of large, relatively remote homes was thin. And taxes were too high. These people too, given the choice, preferred to spend their money on themselves.

As for the domestic market, Mr. Buttigieg, his brother Jeff, regional director of Remax in Malta and Joseph Thuema, J&K general manager, said estate agents working with the government could do a lot to make life easier for those wishing to buy or rent property.

The rental market, he explained was sragnant not only because of the owners’ concerns over legislation, but also because their returns on investment were too low.

“Building a property is expensive and then licences, permits, taxes and other obligations eat too much of the revenue of those who wish to rent out. Rents therefore go up, and it becomes uneconomical for the clients.”

Waiving some of the government-induced costs and giving a better return to the owners would open up the market and actually render the government more in revenue while easing pressures on the market as more vacant properties were put to use, he said.

Among new practices which he would like to see introduced in Malta are easier funding facilities by the banks such as interest loans, a facility he said was used in the UK where clients borrowed from the banks under a special hypothec where they only paid interest and the bank received the capital back at a predefined date or when the property was resold.

There was also need for mortgage brokers to negotiate the best lending deals for property buyers, thus fueling competition among lenders.

Courtesy of the Times of Malta: www.timesofmalta.com