Ta’s growth: Maltese or foreign?
Should their be a cyclical decline in the growth pattern and in the migratory inflow of workers, the demand side of the rental market will slow down, given that most workers do not become permanent residents in Malta. This needs to be taken in the context of the growing number of property units. (See chart above)
Fabri says that in light of the numerous infrastructural projects set to commence in 2019, temporary accommodation should be considered for foreign workers. This would help minimise the risk of over-supply in the housing market.
Social and affordable housing
Fabri says that aggregate growth figures should not distract us from the cohort of people that are not benefitting from this period. Figures show that profits are growing faster than wages, indicating an uneven distribution of growth, with serious social ramifications. The affordability of property has become a challenge for a growing segment of the population. It is crucial, therefore, that the government not only continues investing in housing units, but, more importantly, reforms the way social assistance is given. Fabri believes that Malta needs a supply of temporary housing shelters to accommodate those facing homelessness, perhaps more importantly, another social housing tier which will allow people to have a decent home. Fabri adds that many of those facing economic difficulties often suffer from social and health issues. Support and intervention, therefore, needs to be multifaceted. It is also encouraging to see that the government is actively considering public-private partnerships in this field.
In conclusion, Fabri says that this phase of strong economic growth and fiscal surpluses should serve as a catalyst to truly cater for particular societal cohorts. The property market, especially the rental sector, will remain an important competitiveness determinant, and it is crucial the strains we are currently seeing are addressed. The government’s response, through its White Paper, is a step in the right direction. He also believes that this discussion on rent and the challenges that some cohorts are facing should also lead us to a broader discussion that focuses on the quality, rather than the quantity, of economic growth.