Real estate activity fell by close to 20% in last quarter of 2023

Total turnover in the real estate sector during the last three months of 2023 fell by 19.2 per cent when compared to the preceding quarter, a sharp drop that a real estate insider has however described as an “occasional” occurrence that is typically paired with a rise in promise of sale agreements.

Data issued by the National Statistics Office (NSO), shows that the real estate sector was by far the worst performer – with an important caveat* – among services, which registered an overall quarter-on-quarter increase in turnover of 11.4 per cent.

Comparing the last three months of 2023 to the corresponding period of 2022, the total services turnover index increased by 4.8 per cent, with major increases registered in the motor trade (20.3 per cent) and administrative and support service activities (10.7 per cent).

Other sectors also saw an increase in turnover: information and communication (5.1 per cent), professional, scientific and technical activities (five per cent), transportation and storage (4.6 per cent), retail trade (3.9 per cent), wholesale trade (3.6 per cent) and accommodation and food service activities (2.1 per cent).

On the other hand, a decline in turnover was registered in the real estate activities (four per cent).

BusinessNow.mt reached out to Michael Bonello, CEO of real estate firm Alliance, to see whether the statistics are borne out by his team’s experience.

While shying away from answering that questions directly, Mr Bonello points out that “while the value of registered deeds tends to decrease from time to time, very often, the number of registered promises of sale tends to increase by similar proportions.”

The long-time real estate professionals says that this could “signify delays in concluding deeds, which get carried forward to the next period – as we are seeing a lot of that for various reasons.”

Indeed, industry stakeholders have warned that these delays have become normal – to the detriment of the smooth flow of business.

Mr Bonello added that January 2024 was in fact a record first month of the year when it comes to promise of sales.

*It is important to note that the short term services indicator measured by the NSO includes property sales by businesses, the rental and leasing of real estate, and real estate agency services.

Significantly, it does not capture property sales by individuals, whether they are selling property for personal reasons (such as to move house) or on a commercial basis (as developers). This means that the indicator does not present a full picture of the real estate sector, especially in Malta, where property ownership and investment is widespread, and not concentrated among corporate entities.