The Central Bank of Malta (CBM) does not hold back its reading of the situation in Malta insofar as concerns the prices of residential property. Residential property prices continued to increase during the first three quarters of 2021. The National Statistics Office’s (NSO) Property Price Index – which is based on actual transactions involving apartments, maisonettes, and terraced houses – increased at an average annual rate of 5.3% during the first three quarters of the year. It further tells us that this increase came after a 3.2% increase in 2020 (CBM Annual Report 2021, p. 74).
Similarly, the CBM’s reading of the national advertised rental prices tells us clearly (vide page 79) that such rents have shot up in Malta from the fourth quarter of 2017 up to the second quarter of 2019 (when then the COVID-10 pandemic induced a substantial drop) and then again embarked on this constant shooting up from the fourth quarter of 2021 up to these present times.
Can things carry on like this? Can the country keep creating assets which are become daily out of reach of the average incomes of its citizens? One recognises that there have been several forms of schemes and initiatives by government to make housing “more affordable”. But, increasingly, what “more affordable” is coming round to mean is that an ever-growing swathe of workers is simply being faced with this choice: go into debt for the rest of your life to become an owner of your home, or alternatively pay so much of your working income by way of rent that you will eternally have absolutely no chance of improving your living standards on what will be left in your pocket.
Psychologically the sort of mindset that has been sown into the minds of property developers, owners, and architects, indeed it seems also the courts, has come round to be one where the word property is tantamount to meaning “fleecing” people. And this is because both Maltese governments and the European Union (EU) have paid absolutely no attention to the wide disparities between workers’ incomes here and those in the EU.
These disparities are leading to ever bigger gaps in the incomes of certain sectors when compared to others. When one hears of employers from Europe being present in Malta on the date of our recent general election and on that date interviewing nurses and midwives for jobs in the EU. When one reads about teachers leaving the profession constantly. When one hears about new graduates and prospective ones all counting the days to when they will be leaving Malta to live and work elsewhere. These and other elements are all indications of big holes emerging in our society, and the property situation is one big reason for this.
Continuing to issue building permits without enforcing strict controls on how long can owners/developers/speculators can hold on to such properties being left vacant until the buyer/renter “at the right price” comes along, is certainly not obscene action that can be permitted any longer. There clearly is also dilly-dallying for government to complete its own apartments for renting to applicants. The granting of more building permits on ODZ land. These and others are situations which are perpetuating the social chasm.