Last April, Dhalia Real Estate, together with advisory firm Grant Thornton Malta, published the third edition of The Malta Property Landscape, an analysis of the island’s real estate sector, in which current market trends were reviewed, and analysed, with a view to garner as accurate a picture as possible of the property industry.
Its findings, divided into three main sections – the current housing market, housing sustainability and the commercial office space market – highlighted one recurrent theme: the need to ensure a sustainable approach in growing and nurturing the real estate sector on the island. “This is both from the point of view of environmental sustainability, as well as from a business and commercial perspective,” Chris Bonett, Dhalia’s Marketing Manager says.
“The conclusions showed that we have a surplus of vacant commercial properties, and there is a glaring affordabilty issue in residential property,” he elaborates, adding that these trends are impacting the lower end categories of the market. Indeed, the report notes that from 2013 to 2020, the house price-to-income ratio (that is, the price of a typical property vis-à-vis the median or average income in Malta) increased by 48 per cent. In other words, the cost of housing on the islands has far outstripped the rise in people’s wages.
Mr Bonett, however, notes that as a result, there is an increasing trend of people choosing to renovate existing properties. He also credits recent Government grants for this trend. Indeed, through the VAT grant scheme – whereby property owners are given up to €54,000 in VAT refunds to restore certain types of old properties in specific Urban Conservation Areas (UCAs) – Dhalia has seen an increase in the number of people vying to revive tired, and, in some cases, heritage buildings. “In this way, buyers also get better value for what they are willing to spend. This has been of big interest, so we’re seeing some very nice old houses being turned into amazing homes,” he explains, adding that this has been particularly the case post-COVID, as more people have sought outside space.
Mr Bonett also refers to the €10,000 grant for first-time buyers, which, he says, might have an impact on the industry. “While this €10,000 grant is spread out over 10 years, it still helps,” Mr Bonett asserts. It’s still an uphill struggle for some, however, as the 2023 property report spelt out. For, while the maximum affordable house price for a two-adult household is €304,000 – approximately €40,000 more than the average price for a housing unit, which stands at €259,153 – many households earn less than the median of €40,212 a year. Indeed, for those on the minimum wage, their borrowing capacity only reaches around €145,000 – which is equivalent to only 55.8 per cent of the average property price, the report specifies, thus making property, today, unaffordable for a subsection of the population.
“Of course, this is not applicable to graduates falling within the 24–35-year-old demographic, who have already been working for a few years and, who, therefore, already have some income. For these, as Dhalia has seen, affordability is not a critical issue. They may still afford properties ranging in price from €350,000 to €450,000, with help from the bank, if they have stable jobs. But, for those on the lower end of the income scale, things may be more challenging.”
This is partly why the issue of social sustainability has become of prime concern at Dhalia. “We are looking ahead; we offer professionalism, innovation, commitment and prioritise sustainability and, in so doing, we distinguish ourselves from the competition,” Mr Bonett asserts. Indeed, the firm has also acquired accreditation from the Malta Further and Higher Education Authority (MFHEA) to train property consultants and offer the opportunity for promising individuals to earn their licences. “We have a strong reputation, and we’re a trusted choice locally; this is evident even from the investment we have made in building our human resources and our infrastructure,” he states.
Today, the company also operates under three different brands: Dhalia; DhaliaCRE, the firm’s commercial arm, trading business and office properties; and Luxury Living by Dhalia, launched 15 years ago, but recently rebranded, and catering to the foreign market. “With regards to the latter, we have a collaboration with Luxury Portfolio International, a global portal which highlights the most beautiful properties across the world, featuring them in high-end magazines, such as Condé Nast, Country Life and the Wall Street Journal, as well as newspapers such as the Financial Times in New York.”
Such varied work requires specialists in diverse fields and, indeed, all the brands need Dhalia’s 110 agents to be specifically trained. “We provide educational programmes across the areas of specialisation since we want talents who are able to work within or across these lines of work,” Mr Bonett states, adding that it is quite a feat considering the vast network of 14 offices in Malta and Gozo. “Our team of staff provide the premium level of service our clients expect of us, whether a client is looking to sell, buy or lease – and we take pride in these standards,” he continues.
This perspective is aligned with the firm’s philosophy of sustainability, Mr Bonett concludes, for “we need to ensure better values permeate throughout our sector, whether this is in terms of environmental consciousness, or affordability for the generations which follow.”
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