Wednesday 18 July 2018

Let’s talk about rents, shall we?

This article first appeared in Malta Today 

If there is one thing which really sets my teeth on edge is deliberate misinformation or skewing of facts, not only because it goes(or should go) against every journalist’s instincts, but also because inaccurate, sensationalist info has the tendency to spread much more quickly

That was my reaction when I read a recent press release which was being shared on FB with the bold headline: “FEA WARNS OF MASS EVICTIONS OF MALTESE TENANTS FROM RENTED APARTMENTS IN THE NEXT 12 MONTHS”

FEA stands for Federation of Estate Agents, which describes itself as “a grouping of Professional Estate Agency Owners in Malta to promote and protect the issues related to Real Estate”. According to this PR:

“The Government is insisting on allowing over 60,000 foreign workers into Malta, within the next 12 months, without providing 60,000 Apartments for them to live in. The FEA warns that there is simply no existing vacant rental stock where to put them. Even if we had to build 10 time more than the 6,000 yearly new apartments that are currently being built, it will take 2 years to supply this new demand. We are currently at a Crisis situation where there is not enough rental housing stock to house the existing foreign workers, let alone the new ones yet to come in. What is happening is that there is a bidding war going on quietly, on existing rental housing stock and the foreigners are outbidding the Maltese, every time. Social Housing Minister Roderick Glades said that 20% of all Maltese live in rented accommodation and that works out at 90,000 Maltese. We know for a fact that these are old figures, not those of 2018. The dramatic rise in property prices have pushed entry level property beyond the reach of normal Maltese buyers on normal Maltese wages. This has led to a dramatic increase in rental demand. Our stats indicate that the real number of Maltese in rental accommodation is closer to 29%. That works out at 130,000. In one year time most of these are going to be evicted from their apartments because the 60,000 foreigner workers that are going to be allowed to come into Malta, are going to outbid the Maltese Tenants. It is a dire situation and the Government cannot afford to continue to listen only to the Developers lobby, as their interests do not coincide with those Maltese who are in rented accommodation and will be facing eviction within the next 12 months. Emergency Social Housing has to be built for the Maltese. The alternative is a disaster of our own making.”

Let’s take a look at those figures being bandied about: for a start, the 20% of Maltese who rent are not necessarily in privately-owned rented accommodation, but also include those in social housing and rent-controlled properties for which the rent is quite low.  So while it is true that the number of affordable rental properties on the market has decreased, the demand from the Maltese is not as hefty as the author is making it out to be.  

As a nation, most Maltese people still believe in owning their own home, and many are now building second and third floors on top of their existing residence in order to ensure that their children will have their own properties.  Statistics published recently showing that the Maltese tend to remain living with their parents until the average age of 32, further confirms that many prefer to delay moving out, while saving money to buy their own home.  So this should put things more into perspective. 

Of course, this does not mean that regulations should not be put into place to protect tenants, no matter their nationality, because it is clear that they are needed.  To quote Roderick Galdes on the issue of rent reform: “It is not right for rents to go through hefty overnight increases. It is wrong whether the tenant is a Maltese family, a Gozitan student, a single parent or a financially stable foreign worker.”  

While the White Paper on the rental market is still being discussed, and as there are no real regulations in place, ordinary citizens have taken matters into their own hands and are sharing tips on how to ensure that they do not end up in a rental nightmare, especially for those who opt to share an apartment or sub-let.  

The need for 60k more foreign workers is another alarming figure but does not take into consideration a fact which emerged recently from data published by Malta Today: that most of those who re-locate to Malta for work move on within one year. In fact, when asked about this, JobsPlus CEO Clyde Caruana said that the numbers were way off the mark and the real figure was closer to 6000. “When making predictions …it was important to consider both the inflow of workers as well as the outflow.”

The worst part about the above PR is that it uses the usual tactic of blaming all our problems on foreigners, when we should really be pointing our fingers at unscrupulous landlords and developers who are exploiting the situation through insatiable  greed.  Many of those involved in the rental property market are already comfortably off, if not downright wealthy, so raking in a few additional hundreds of Euros per month won’t really make a difference to their lifestyle, but on the contrary, seeing your rent go up from €400 to €600 or even €800 will definitely have an adverse affect on your life if you rent. 

And, of course, I am sure that the nice, plump percentage received by estate agents as commission has nothing do do with the escalating prices.

But the most irresponsible statement of all is the unfounded claim that hordes of Maltese tenants are going to face eviction. Well, if this does start happening, and we start seeing people sleeping in the streets because they cannot afford decent housing, there is no valid reason to blame foreigners for having pushed prices up. I hardly think that anyone coming to live here will stamp their foot and demand to be charged €1000 per month for an apartment rather than €500. Can we for once be honest and admit that the finger-pointing should be directed towards ourselves instead? 

In yet another story full of unfounded claims (this time on Lovin Malta)  Steve Mercieca, co-founder of Quicklets, claimed that the rental market is ‘plateauing’ and that there is nothing to worry about.

“When compared with some of Europe’s biggest cities, rent in Malta is the cheapest by far…The average rent in Malta is just under €947 a month and that’s mainly two and three bedrooms as the Planning Authority doesn’t allow blocks of one bedrooms easily. When compared with some of Europe’s biggest cities, Malta is the cheapest by far, except for Athens. Meanwhile, properties in Malta are huge in comparison – a 40-50 square metre apartment in London or Amsterdam costs more than a 100 square metre apartment in Malta.

However, in Malta, we have a tendency of not liking to spend too much on accommodation because our culture is one where we invest in our lifestyle more than in our property.”

If Mr Mercieca thinks €947 per month is affordable for the average person, then his yardstick is very different to mine.  He is also completely wrong about Maltese people not spending on property because from my experience, that is ALL they think about, especially when it comes to settling down.  Il-post (the house) becomes the number one priority and it is still common for engaged young couples to wait years before getting married until they have finished doing up their home.  

Scrolling through the over 300 comments in reaction this article, I was pleased to see that I was not alone in thinking his statements were pure hogwash.  The most-liked comment was definitely the one posted by Sasha Darmanin who wrote, “ It should read: “When compared with some of Europe’s biggest cities, salaries in Malta are the lowest by far”.

I guess the only saving grace in this era of swiftly-shared misinformation is that in today’s world, preposterous remarks can be immediately shot down by those who are quick to point out what is blatantly not true. 

 

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