NEWS | Wednesday, 13 February 2008

Sant reiterates housing subsidy proposals

Karl Schembri

The Labour Party yesterday reiterated its proposals aimed at subsidising first-time property buyers, who could save up to €15,500 (Lm6,600) through a mixture of schemes.
But Labour Leader Alfred Sant also admitted that the schemes might even push property prices higher up. When asked about the possibility of real estate agents increasing property prices since first-time buyers would have more cash in hand, the Labour leader admitted this was a possibility.
“Yes, it is possible, but then there are also others selling property who haven’t managed to get the price they’ve set, who could lower their prices in reaction to this policy,” Sant said. “So it can work both ways.”
Speaking at a press conference outside the Housing Authority’s offices in Floriana, Sant reiterated his party’s pledge to give first-time buyers a subsidy on interests that would not exceed 4.5 per cent annually and to give grants of 10 per cent of the property prices to young couples and those owning unique residences.
According to Labour’s proposals, first-time buyers of property costing not more than €116,500 (Lm50,000) will benefit from new schemes that would also safeguard debtors who lose their job by imposing a moratorium on the payback of their loan and interests.
Sant also did not rule out building social housing units outside the zones of development but said the first priority would be building in areas that were earmarked for development.
“One should never say never,” Sant said when asked about building ODZ social housing. “But of course one has to go for the developable land first and discard proposals on arable land. Besides we have a clear policy to safeguard our natural and environmental heritage.”
Sant quoted studies from the Cana Movement and the Curia’s commission on peace and justice to highlight the plight of property buyers who end up repaying their loans for 35 years, with some €4,600 (Lm2,000) to €7,400 (Lm3,200) annually.
Quoting a Central Bank study held in 2006, Sant said the cost of an apartment rose from €26,800 (Lm11,500) to €121,000 (Lm52,000) in 20 years – a rise of 350%.
Likewise, the price of a fully finished maisonette rose by 350%, from €29,600 (Lm 12,700) to €133,000 (Lm57,000).
In the last 10 years, bank loans on the buying of property increased by 300%.