‘Rent In Malta Is Stabilising’: Major Real Estate Agents Pour Cold Water On Former Colleague’s Mass Eviction Warning
Real estate agents say Malta's rent spike is over as more apartments released onto the market
Some of the major real estate agencies on the island have played down concerns by the federation which used to represent them that rent inflation will soon see thousands of Maltese families kicked on the streets.
The Federation of Estate Agents yesterday warned that Maltese tenants are fast being priced out of the rental market as a result of the influx of foreign workers outpacing the rate of property construction.
The long-standing federation is led by Simon Debono of Simon Estates, the estate agent who made a stir last month when he warned that Malta’s soaring rent prices are forcing Maltese people, including those in employment, to relocate to garages without basic necessities.
However, after yesterday’s mass eviction warning, other major real estate agencies - including Frank Salt, Remax Alliance, QuickLets & Zanzi Homes, Belair and Dhalia Real Estate Services - pointed out that they had broken off from the Federation months ago. These agents are now represented by an Estate Agents Section (EAS) within the Malta Developers’ Association, a move which they said has essentially reduced the Federation to a one-man-show.
“We disassociate ourselves with any comments being made by Mr Simon Debono in regard to the property market and estate agencies in general,” the EAS said. “Mr Debono’s comments represent his own personal opinion and in no way reflect the opinion of the majority of the leading estate agencies in Malta. The absolute majority of members of the former Federation of Estate Agents now form part of the Estate Agents Section within the MDA. Mr Debono is simply a force of one. His claims that he represents the estate agents in Malta through any form including as part of the former Federation of Estate Agents are completely false.”
Douglas Salt, who leads this new estate agent section, dismissed Debono’s warning as “absolute rubbish”, arguing that the rental market is stabilising and only some 3% of tenants are Maltese anyway.
Federation of Estate Agents secretary general Simon Debono
“Construction only started picking up the pace a few years ago and properties that started being built then are now being released on the market,” he told Lovin Malta. “This is increasing the supply and correcting the market and in fact, rent is no longer increasing by 20% a year but by 3-4%. Consequently, landlords who have been over-selling their properties in the past few years will be forced to bring their prices down to their real market value.”
Similarly, Steve Mercieca - the owner of QuickLets & Zanzi Homes, the largest rental agency in Malta, said the average rental market clearly started plateauing last year.
“Properties that rented for €400 a month shot up by 93% in the three years between 2013 and 2016, but remained practically identical this past year,” he said. “Simon Debono is jumping to unfactual conclusions which could create false expectations from landlords, who might actually not renew their current tenants’ contracts expecting a higher rent next year.”
He dismissed claims that rent has become too expensive in city centres, arguing that Malta still enjoys the second cheapest city centre rent prices out of all EU countries.
“The problem is that people still expect to rent out apartments in Sliema and St Julian’s for €400 a month, when that’s not a realistic price for city centres anywhere in Europe,” he said. “Sliema and St Julian’s aren’t over-valued in the market, but rather they used to be under-valued in the past. The over valued properties are the ones located outside city centers, on the third floor with cheap furniture and no views or lifts. These properties will not keep fetching €1200 per month unless they are renovated. Besides the international talent being attracted to Malta to set up business and employ locals and foreigners, the sudden increase in rent was due to under supply of rental units and Malta’s increases popularity on social media.”
The clash between estate agents comes as the government gets ready to publish a White Paper on housing. Prime Minister Joseph Muscat has said the plan is to stabilise the rental market and clamp down on rent abuse but without state intervention in the market.