Full speech of Hon. Roderick Galdes talks about the property market in his speech at MARE Summit Malta 2022
The following is the full, unadulterated speech that Hon. Roderick Galdes, Minister of Social and Affordable Accommodation, delivered on the second day of the MARE Summit.
Introduction
It is indeed a pleasure to be here among leaders and drivers of one of the crucial pillars of the Maltese economy – the property market.
I have to say, it is remarkable, that the Housing Ministry is among those involved in this multi-layered discussion. Not because I happen to be the Minister responsible.
But because it shows, that the efforts placed throughout the last mandate, have put the State among the main actors in the accommodation sector, and the property market in general.
There was a time – not long ago – when State intervention was feared. The story of the Maltese property market goes through extreme fluctuations of State intervention. From nowhere to be seen, to a severe degree of regulation that killed a sense of private initiative. And back to the State taking a passive observer role for the good part of the last two decades since the turn of the Millennium.
Intervention. What kind of intervention?
Then the unprecedented growth and pace of the rental market switched on a red light. It showed us clearly, that there can be no sustainable growth without a stable housing market. More than that, that such stability is tenure neutral.
Mild regulation in the rental market enabled a shift from a haphazard risky market to a calmer, more stable systematic market.
These are changes we addressed by means of sensitive, studied, widely discussed reforms in the rental market, which are now bearing the desired fruit.
As much as it was legislative, the State’s intervention in the market was physical and financial.
We intervened physically by reviving a dormant public housing programme which shall provide supply for a class of low-income earners increasingly alienated from the radar of conventional market developers.
Secondly, we intervened with an extensive restoration programme, to breathe new life into village cores which were vastly becoming ghost towns. A restoration programme in which the State walked the walk through direct action to reignite the use of vacant dwellings which yields environmental, as much as economic results.
The State intervened financially to fill gaps left by the market. Healthy relationships forged with local credit institutions meant novel co-ownership facilities and lighter repayment plans. Relationships and facilities, which helped thousands of individuals join the homeownership class in a couple of years.
Considering the fact that these past years were conditioned by a global pandemic, it is safe to say, we have managed, together, to take the housing sector from a moment of impending crisis into a phase of renewed stability.
Where do we stand?
Numbers point towards a healthy trend of growth in the local property market. Demand is constant with an upward trend in yearly property purchases.
Increasing numbers of retail investors purposely choose the property market.
With a consistent ratio of first-time buyers, year on year.
It is evident, that this pillar of Malta’s economy remains a firm favourite among investment portfolios, but also yields decent, secure returns.
It is equally evident however, that there are menacing hurdles for young individuals and couples to make it at entry level.
There is a relatively slight increase in the income threshold necessary to attain homeownership.
The principle which guided us over the past 5 years was one rooted in the belief that adequate accommodation is in fact a right and not simply a commodity. From this standpoint such challenges – despite being experienced by one of the smallest cohorts of prospective buyers in terms of their percentage share of the aggregate demand – should not and cannot go unnoticed.
They cannot go unnoticed in view of the bigger picture. A bigger picture of a country which intends to keep on growing, intends to keep on harbouring top talent, and intends to keep ensuring a high quality of life to its hardworking inhabitants.
What is next?
So in mapping our short, medium to long term future, there are important considerations to make.
As legislators and policymakers, it falls upon us to calibrate the type and degree of intervention the market requires. Or society requires.
Whatever is done, one thing is certain. The country needs to maintain a constant investment influx into its property market.
Property was, is, and shall remain a high-yielding market.
In this light, we have to ask important questions:
- What kind of society do we envisage?
- What kind of neighbourhoods do we want to live in?
- What kind of systems shall we put in place?
I won’t answer all these questions here, today. But as Minister I will surely engage with all the actors in this vast network, to find the right balance that creates collective social value.
It is my view that we ought to think of the big picture consisting of healthier neighborhoods alongside principles of affordability, from the get-go. The pillars upon which we would like to build our society, must dictate our development planning, and our investment prospectii.
It is clear to me, that sustainable systems are only built around holistic and cohesive structures.
As a Government, in the short to medium term, we remain intent on directly assisting the segment of the demand side facing seemingly unsurmountable challenges.
We also remain intent on forging important relationships with credit and financial institutions to bridge the gaps left by the market.
We remain intent on synching public and private efforts to maintain and possibly redirect investment in the property market that yields social capital.
We remain intent on inter-ministerial initiatives for holistic policy directions.
Conclusion
It is pleasing to note, that years of action and positive outcomes, made private market actors more welcoming of State presence and participation in this sector.
It is more and more clear that well-cured regulation is conducive to sustainable market dynamics, and not the opposite.
And besides regulation, there is collaboration. Only by listening to each other, sharing best practices, and aligning our goals, can we devise the cohesive systems we look for, for truly inclusive and sustainable socio-economic growth.
Thank you for your patient attention!
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