Property sales remain “encouraging”, according to real estate agencies, putting paid to prospects of major drops in post-COVID-19 prices and pointing only to “more realistic” corrections so far.
It is early days for analysis, they agree, but no significant changes have been noted in prices despite the million-dollar question being asked in view of the economic climate due to the pandemic.
The foreign market has also shown no signs of decline, they concur, although it is just the cherry on the industry cake.
It has been a case of “postponing more than cancelling” sales over the last two months, and already the difference is being felt as things move ahead cautiously.
Confirming no indication so far that sales will suffer, Belair Property managing director Ian Casolani said what is priced correctly – or where the owner has corrected prices – is still selling.
“Pleasantly surprised” by the buyers out there, he welcomed the realistic adjustment after seven years of “gluttony and craziness”.
There are always those properties that need to go down more than others for a quick sale; and then there are those that will afford to hold out in the hope of achieving their asking price – but they may not, Casolani cautioned.
On the other hand, he burst the bubble of buyers waiting for prices to go down. “It is not happening yet, although this is not set in stone.”
High-end, established developments and villas in good locations will hold their value. Overpriced properties will slowly decrease to realistic levels. Smaller ones in areas not so much in demand may struggle more, while developers with large portfolios may look to shed some properties at a time when demand slowed down due to the partial lockdown.
But overall, the market will always find its own level and balance out, the agencies agreed.
Property sales declined by at least 50 per cent over March and April, which was obvious and expected given the circumstances, said Frank Salt Real Estate director Grahame Salt.
“It could not be any other way. We could not even get into people’s homes. It was not even like a recession. How can you sell a house if you cannot even view it?”
The foreign market has also shown no signs of decline
Nevertheless, he was quite impressed that some deals were still closed remotely and says the momentum has picked up slightly this month.
“With hibernation mode over, we need to see what will happen between now and December,” he said, envisaging that it could take until the end of the year, assuming the airport opens in summer, to reach some sort of normality.
Even then, realistically, sales would probably hover around 75 per cent of the annual average 15,000 of the last four years, he maintained, adding that anything upwards of 11,000 meant the market was doing very well.
Foreign buyers – although these were more of a boost than crucial to the market – have been unaffected and were still showing an interest in investing in Malta. It was more a question of postponing purchases due to the impossibility of travel, rather than cancellations.
The way Malta coped with the pandemic has been an added feather in its cap, Salt added.
Meanwhile, the Maltese were coming out of their shells after waiting to see what was happening, and Salt predicted a gradual increase in confidence, saying people had not lost everything overnight.
Distinguishing between value and price, Salt said the former would not be affected, but the latter would have to reflect a property’s worth if owners wanted to sell. They would need to take proper advice and he believed more would listen, rather than take chances.
The segment of the market made up of investors buying to rent may decline slightly, but this could be countered by the odd deal from developers wanting to offload some property.
“Even if they cannot rent right now, they are more likely to invest in rentals than anything else.”
The majority of pre-COVID-19 promises of sale did not fall through and commitments were honoured, said Robert Spiteri Paris, managing director of Perry Estate Agents.
He too was encouraged by the fact that people did not panic, as expected, and foreign buyers still showed full confidence in Malta despite a challenging two months in partial lockdown where agents were not working and the international market was paralysed.
“With the right and safe protocols in place, people are more comfortable and are now opening up their homes.”
Apart from the odd issue due to changes in exchange rates or banks’ procrastinating on approving loans, “the business is there”, he said, pointing also to the government’s recent lifting of the freezing of the running time for promises of sale to give all parties some breathing space.
Source: Times of Malta