Abrupt and unforeseen, COVID-19 has presented companies with a choice: change your ways or be left behind. Forging ahead in the local real estate sector is RE/MAX Malta. As Chairman, Kevin Buttigieg looks towards the coming months positively, he reflects on what local property experts have learnt.
The coronavirus pandemic hit the global economy with a bang, and Malta has been unable to escape its clutches. Spring 2020 witnessed rampant speculation about how property buyers, sellers, landlords and tenants would be impacted. But now, with the benefit of hindsight, the pandemic’s effects can be put into perspective – and all has certainly not been lost. RE/MAX is lucky to have been in a position to analyse the situation and understand what really needs to be done to keep things going professionally and consistently. “It’s all about technology, training and being professional nowadays,” begins Kevin Buttigieg, Chairman of Malta’s largest real estate company. “We have always been at the forefront and this has helped us to keep our positive approach.
“Malta’s property market had already started to slow down around June 2019,” he continues. “This wasn’t alarming at all. It was actually a much-needed start to a price correction. In fact, the situation as we see it today isn’t just about COVID-19. People still need a roof over their heads so business will always continue. Re/Max Europe has positioned itself to be on the same pace as last year so this says alot of how property markets react to pandemics around the world.”
The real estate agency has since come to terms with swift shifts in the property sector. “Rentals have taken a big hit, with a 15% to 30% downturn,” continues Buttigieg, “which won’t recover for the next two to three years. About 85% of our rentals depend on foreign clients, so with fewer people immigrating at the present moment, the lettings slump will persist. And we’re yet to see how the working-from-home concept will impact us, but I personally believe it won’t make a big difference as I believe people in many industries need to be home to produce.
“If the lettings sector remains precarious, landlords will be affected. If they rely on their rental income to repay loans, they might be forced to sell their properties. But a quick sell is unlikely to garner a lucrative return. Currently, sellers are likely to make a 3.5–4% return on investment rather than the 5% they’ve grown accustomed to. But in terms of buying, the economic downturn hasn’t really led to a market full of bargains, which is contrary to popular belief. Aside from a slight price correction, things haven’t changed much.”
Despite the pandemic’s sobering effects, buyers’ choices seem to have been redirected positively. Lockdown measures have compelled people to reflect on their lifestyles, reminding them that close relationships with family and friends are essential to sound mental health and wellbeing.
“The common buyer profile is now someone looking for outside space at home,” explains Buttigieg. “In fact, sales of villas with gardens and pools have increased. Being able to spend time outdoors with family and friends while at home is now a top requirement across the entire spectrum of buyers. It’s no longer a luxury associated only with wealthier clients. “This all means that the time for a complete overhaul of what and how we build in Malta is now. There are far too many restrictions on balconies and terraces that impact what we can offer low to mid-income earners.” And besides an outdoor space, the apartment market has seen a surge in requests for an additional room that can be used as a home office.
Whether this change in routine is here to stay is still to be seen, but Buttigieg agrees that 2020 has given the market a chance to stabilise and businesses a moment to reflect and re-evaluate. “At RE/MAX, we’ve taken this as an opportunity to invest in our agents. Through our training academy, we’ve honed our employees’ knowledge and skills. And while in-person viewings have slowed down, we’ve done well with our virtual property tours. Our associates are very tech-savvy, which has given us the flexibility to handle the situation on a month-by-month basis.
“Rethink, restructure and reorganise has been our mantra. We’ve always aimed to make ours a respectable profession, and 2020 has enabled us to reposition this at the top of our agenda. By means of the extra training time, we’ve tended to our weak spots, increased support for our agents and improved their career prospects.”
Buttigieg believes that a clearer picture of what lies ahead will emerge in mid-2021. “Until then, we’ll continue investing in professional education to ensure the business overcomes this wave of uncertainty. Our RE/MAX associates will continue following strict safety protocols and we urge the public to do the same. Now, more than ever, finding a good agent – who is trained and experienced in current market trends – is crucial to guide you in the right direction.”
Contact the RE/MAX Malta team today for more information on how you can make the most of buying, selling and renting property in Malta and Gozo