Property prices skyrocketed last year despite a substantial increase in the number of approved housing units from 6,128 in 2003 to 9,081 in 2005 – an increase of 47% in just three years.
This is the major finding of the state of the construction industry report issued by the Building Consultative Council. Since 2003, prices for flats have registered a 40% increase while the price for maisonettes increased by 36%.
Compared to 2004, in 2005 prices for flats increased by a massive 20.3%, while prices for maisonettes increased by 15.3% while terraced houses by 9.3%.
Data provided by estate agents Dhalia shows that the sharpest price increase was registered in one-bedroom flats. While the price of these flats has increased by 48% between 2003 and 2005 the price of two-bedroom flats increased by only 7%. According to Dhalia’s data, the price for 3-bedroom flats remained stable.
According to the report this is an indication of an increased demand for housing by single people. Two-bedroom maisonettes have also registered a price increase of 35 % while three-bedroom maisonettes have seen their price increase by 37%.
Increase in flats
Figures for 2005 also show a significant growth in the number of housing units. The number of units approved by MEPA reached the highest level recorded in the last seven years.
While alleviating some of the pressures on the countryside, the intensification of construction in already built-up areas is creating new problems for residents living in residential areas. This increase can be attributed to a substantial growth in the number of approved flats.
On the other hand the number of other dwellings remained stable. The number of apartments increased from 60% of the total number of approved applications in 2001 to over 80% in 2005. On the other hand the percentage of maisonettes dropped from 19% in 2001 to 12% in 2005.
In just a year the number of approved apartments jumped from 5,265 in 2004 to 7,539 in 2005, which also saw a growing trend towards the replacement of residential units by units with a smaller footprint and higher buildings.
Conversion and redevelopment of old buildings only resulted in a gain of 645 units in 2001, while in 2005 it resulted in an increase of 4,577 units.
The study shows an overall growing industry, with the contribution to GDP by the Real Estate, Renting and Business Activities sector registering a year-on-year increase, with contributions spanning between 10.04% and 12.23%.
Against this background, a sectorial analysis of the various economic activities shows that the average wage in the Mining and Quarrying Sector is equivalent to Lm6,102.24, that within the Construction Sector is established at Lm4,797.23 and that within the Real Estate, Renting and Business Activities was Lm5,393.12. These values are to be compared to the average wage in Malta which stands at Lm5,197.