Objective is to regularise rental market irrespective of rising costs – Finance Minister
Finance Minister Edward Scicluna said that the government’s objective is to regularise the rental market “irrespective of ris- ing rental prices”.
He was giving comments to The Malta Independent while addressing the launch of a Western Union branch in Birkirkara. Scicluna was asked for an update of how the government is prioritising the rental market in view of those struggling to make ends meet.
While it is true that a majority of Maltese own homes, those lowincome individuals and families who live in a rented dwelling are increasingly suffering as rental prices skyrocket while wages fail to keep up.
Currently, there is nothing regulating the rental market and nothing stopping a landlord from increasing rental prices exorbitantly from one contract to the next.
In his comments, Scicluna said: “There are many facets to it. One is the macro-economic, in other words, is it a bubble? Could it explode? So far we have not seen it in this way.”
KPMG were commissioned by the Malta Developers Association to carry out a study of Malta’s property and rental market. In it, KPMG remarked that so far there are no signs of a bubble. Other organisations have however called on both the rental market and the property market to be closely monitored in order to avoid any surprises.
Scicluna continued: “Economists say that the situation is reflecting fundamentals – in other words supply and demand. Right now there is a bigger demand than supply, and we know where the demand is coming from. It is coming from the tourism sector, with tourists spilling out of hotels into private residences and from foreign workers.
“Nobody would say that because of what’s going on we need to stop people coming in the labour force or we have to stop tourists. The demand will continue. Now we need supply to keep up with it and we are seeing that supply is respond- ing, so in two – three years time you would see that prices will moderate.”
The social dynamic
Scicluna spoke of the need to ensure professionalism and protection when talking about regulating the rental market.
“In the meantime you have to see whoever is hurt. In the next budget and in subsequent budgets we always do that. We see those who are really hurting with low income, people living in garages because they cannot afford more, we need to know more about it.
“Regularising the market is also an objective irrespective of rents going up or not. You have to be fair, but you have to regularise the market.
“In other words, you need books, contracts, conditions, you need to give notice. You need to protect on the one side that bills are paid and you need to protect the other side too. That is what the agency in the making is trying to reach, it won’t be easy for them but I just hope that it will be better than it is today.”
Issues surrounding the rental markets have taken various angles over the past few years, from landlords failing to declare their rental income resulting in tenants having to pay the higher water and electricity tariffs, to a lack of minimum standards for properties that are placed on the market.
The rental market has also been subject to negative media attention because of the explosion of development permits being awarded by the Planning Authority. Citizens often take to social media to complain about blocks of flats being sanctioned for development in streets with older, terraced houses, such was the case in a particular street in Attard.
Clyde Caruana, head of JobsPlus has recently been quoted in an interview where he says that rental prices are expected to stabilise in the coming months due to numerous dwellings being completed and placed on the market.