Property prices drop but sales remain strong

Property prices continued to drop in the first three months of this year but were up by nearly 14 per cent when compared to the same period in 2007, which was considered by the industry as a good year.

The National Statistics Office said the prices of all properties registered a decline of 2.83 per cent when compared to the corresponding period last year.

The price of apartments dropped by 5.26 per cent while that of maisonettes dropped by 2.19 per cent.

Although the NSO figures showed that sales were down by over 15 per cent, industry sources said the decrease was more gradual than that.

The estate agents said that they had seen a change in mentality by the sellers, who are now pricing their properties closer to the market value. Before, they would inflate the price, hoping to get more than what the property was worth on the market.

Moreover, they said there was a drop in the number of property speculators, who would buy property to sell.

With regard to renting, the estate agents said this was still strong although the Maltese culture of being a home owner was still as strong as ever. They said the renting industry was thriving because of the large number of foreign companies based in Malta, whose employees were renting property around the island.

Government statistics show that between January and June this year, 5,620 property deeds were registered. This amounts to 46 per cent of the 12,190 deeds registered in the whole of 2008.

Promise-of-sale agreements in the same period this year totalled 3,956, nearly half of the 8,188 agreements registered in 2008.

In the first half of this year, 1,520 apartments were sold, compared with 3,207 in 2008. Terraced houses sold in 2009 totalled 938, compared to 1,878 in 2008. A total of 147 penthouses were sold this year compared to the 326 sold last year. Maisonettes sold this year numbered 541 as against 1,168 in 2008.

The estate agents observed that apartments in shell form and houses of character saw the steepest drop in prices. One estate agent said that apartments in Attard were among the cheapest on the island due to the oversupply in that town after house owners decided to demolish their villas and build flats instead.

An estate agent said he witnessed a sudden increase in property sales over the past two to three months. "I saw an increase. I believe the property market has touched the bottom and now is the right time to buy and sell. There are some good deals out there. Prices in Malta have not plummeted that much, especially when compared to other countries, like Spain, which saw a drop in its property prices of 30 per cent, and Dublin, where prices are down by 25 per cent," the estate agent said.