Parliamentary Secretary Chris Agius outlines how Malta is dealing with the pressures of a rapidly expanding property market and the nations dedication to maintaining a very high level of security for its residents.
What has stimulated Malta’s rapid growth in the property market?
We were elected to government back in 2013 when our economy was not doing very well. We had a rise in unemployment a lack of new FDI and a slowdown in construction and property. In our first budget of 2014 we created a scheme to exempt first-time buyers from the first 150,000 euros of stamp duty. That immediately created a new sense of business and new properties were being built. Thousands of families and young people have benefited from this scheme. Last year we increased the exemption amount to 170,000 euros. Another thing we did for our locals to get a mortgage was help them pay the required 10 percent deposit with no interest.
We also brought new industries such as the gaming sector and financial services sector which employs thousands of people in Malta. This has given a new lease of life for the construction sector and the demand for property is always on the increase.
What challenges has this rapid growth posed?
One of the biggest challenges is the lack of skilled labor. So, we have begun bringing people from other countries to help with the labor shortage. We have a very good education system in Malta which is free from kindergarten up until University, and university students get a stipend of 100-150 euros per month whilst you are studying. The stipend is higher in the IT sector to encourage more people to join this sector. This means that most of our youth get a good degree and want to work in higher paid sectors, so we struggle to find people to work in lower paying jobs.
This also caused a problem with lodging. Therefore, the government has embarked on a project of building 1500 social apartments which are given for free at very low rent for people who cannot rent from the private sector.
We see every challenge as an opportunity. Another big project we have started as a government is building new roads all over Malta. We have embarked upon a 700 million euro project started two years ago, to improve infrastructure in line with growth. Our Prime Minister is one of the youngest in Europe, and we have a very young cabinet. There is a lot of energy everybody wants to see his or her sector succeed. We have made the country successful and we shouldn’t sit on our laurels.
Are you taking appropriate action to preserve Malta´s heritage and environment?
Although there is a lot of construction going on, we look after what our forefathers have left us. We spent EUR 14.5 million on Fort St Angelo to make it a tourist attraction, we have spent 15 million on the National War Museum at St Elmo which was used as the British HQ in world war one. We have many ancient churches that are preserved, and our village cores are protected. We have issued 23 million euros so that those who live in urban conservation areas receive grants to maintain their traditional wooden facades.
There are environmental pressures and we have many active environmental NGO´s in Malta, but as a government we have decided that we will not increase the development zone, so we haven’t changed the plans for green areas since 2006.
To what extent is there an opportunity for the Middle East with regards to the property market?
We recently went to the UAE as a delegation to be part of the real estate expo, The President of Malta came with us so it was almost a state visit and we also had the opportunity to have a private meeting with the Crown Prince. Our President and the Crown Prince inaugurated the Expo. Almost 50 companies from the construction sector took stands at the Expo.
We have a lot in common with the Middle East and there are still huge untapped bilateral opportunities that we can access. It was only recently that we started building high rise buildings, as we are a small country we must grow vertically, and we can learn a lot from Dubai in this regard.
What is Malta´s core strength?
The most important thing for us is that we are a safe country and we should do all that we can do to ensure this country remains one of the safest in the world. We cherish our security, and although economy, lifestyle, climate and friendship are all important, security is one of the most important things that we enjoy in Malta.