Despite Malta’s southern, laid back approach to life, businessmen on this island are blessed with operating in a small enough network to collectively respond to changing market forces swiftly and with incredible verve.
With such a small and cramped business community, it becomes easier to learn from competitors’ successes and mistakes, or better still, for the market leaders to meet up informally and share ideas by which a sector may respond to new forces in the market.
When the entire economy is threatened and the survival of many players in a specific sector – such as property – is at stake, the speed with which an entire sector collectively goes out with the old and in with the new is quite impressive.
Not the same can be said for government. With the national, budgetary and electoral interests in mind, ministers tend to become warier of a change in strategy. Also, the level of commercial expertise within government cannot be compared to that of the industry, where the financial effects of decisions are felt more directly – so choices in business tend to be made with more confidence and better skill.
It would therefore be advisable for government to observe the way the property sector is responding to the recession and back it up in the best way possible. When seeing the efforts players in this sector are making to attract foreign investment, a little help from the state would be justifiable and very much in the national interest.
In today’s edition we interviewed Chris Grech of Dhalia, who needs no introduction. Grech complains about government strategy going against the grain in making it difficult for offshore investors to buy property in Malta. With over 50,000 vacant properties scattered around the island, the argument of retaining restrictive policies to protect availability for the Maltese does not hold water.
Also worrying is the apparent governmental lethargy over the fate of the hundreds of luxury apartments intended for resale to foreigners. It is amply clear that most Maltese nationals having the means and interest to purchase luxury property for residential purposes in Malta did so already. Developers, estate agencies and investors are now looking for end-users, and no matter how hard they look – they will not be able to fill up all the properties with Maltese families.
It is now really a matter of looking abroad, as originally intended. But with crashing property prices in other Mediterranean countries, this challenge becomes all the more difficult. It is not easy to predict how vast the consequences on the local economy could be if these apartments remain unsold, but whatever happens, the repercussions would be dire.
It now therefore becomes in the national interest to enter into the international market aggressively for these apartments to be sold, and to do so, we must first look into reinforcing our national product and promote our identity as a nation of southern, warm, hospitable and festive people.
Familiar? If we lace parts of our commercial strategy with tourism, one finds that not only are the two sectors inter-related – but success in either of the areas will benefit the economy as a whole.
Estate agencies have been going down the route of promoting the wonders of Malta already. This is their way of collectively reacting to the lull in the market. But no matter how large an estate agency may be, it will never have the commercial interest or the means to build roads, improve public transport, develop yacht marinas or train the Maltese to be service oriented. This is government’s sole duty.
It might be a good idea for our Finance Ministry and Malta Enterprise to build synergies in combining tourism and property strategies.
It would also be beneficial for the Federation of Estate Agencies and the Malta Hotels and Restaurants Association to address the situation with government together and lobby for common strategies and common interests.