[WATCH] Jake Azzopardi: ‘Property supply in the market still reflects the realities of 20 years ago’

Jake Azzopardi leads the Foundation for Affordable Housing, which released a study analysing the crucial role of the family in the purchasing of property.  

The study shows how families provide finance, informal loans, inter-generational skills and industry contacts to counter the rising costs of property. It also helps policymakers understand what creates affordable housing in such circumstances. 

The foundation, a result of a collaboration between the government and the Maltese Catholic archdiocese, is seeking to ensure there is a steady supply of affordable housing for people with different economic backgrounds, and Azzopardi says understanding the family institution in Malta is crucial for the sector’s long-term sustainability. 

“To have a comprehensive discussion on the sector, and how it feeds off these different players, it is crucial to analyse the different players, and that is why we are analysing the family,” he tells me.  

Malta retains a high rate of young people who only move out of their parents’ home at an older age when compared to those in Northern European states, something Azzopardi says is not “necessarily good or bad”. 

Azzopardi says the study shows that such a reality could allow them to continue advancing in their studies, while also saving more money, therefore opening the door to improving their socio-economic state. 

“In the present circumstances, it is one of the ways with which young people are able to cope with the situation they have in front of them,” Azzopardi says. 

The study also highlights the trend of increasing dependency on home loans to purchase properties. Azzopardi says it follows similar trends on crediting for larger purchases, and rather than speaking about dependency, the conversation should be steered towards accessibility.  

“Loaning allows you to plan your spending, and so is a positive in that regard. What we have to ensure, and that is our focus, is that people with different incomes have the opportunity to access a loan and enter the property market,” he says.

The following is an excerpt from the interview.  

The full interview can also be followed on Facebook and Spotify.

What is the Foundation’s role?  

In the past years the challenges on housing affordability continued to grow, and people who would not normally be in that category, who have average or slightly lower than average income, are facing affordability challenges. In order to have a supply of housing which is available to a number of sectors in society, you needed an entity which provides a layer of affordable housing on a permanent basis, and not having these people depend on one-time or periodical schemes. 

More than half of young people aged between 18 and 34 remain with their parents according to the study. Does this worry you? 

I think it is a fact which needs to be recognised, and it is not necessarily good or bad. It is also a fact that due to this trend; you have more people continuing to study, strengthening their socio-economic state. Thanks to Dr Daniel Cassar’s work [the study’s author], we have recognised this intervention by the family to improve the next generation’s socio-economic state. It leaves a long-term positive effect.

So, you are saying this is leading to more opportunities for young people to continue advancing in their studies, and having more money in their pocket when they decide to take the step of buying a property… 

What I am saying is that it is one of the ways our society has adapted to the reality we have. I understand there are good reasons why young people leave their parent’s home at an earlier age in other countries; maybe the size of other countries also allows them to do so. In our wider circumstance, it is one of the ways with which young people are able to cope with the situation they have in front of them.

The study shows that 10% of properties were gifted. Is this creating a divide between low- and high-income earners which would be more apparent in 10- or 20-years’ time? 

It is in part the result of previous interventions by different governments over the decades on home ownership. You had the previous generation which benefited from several schemes, and now that generation is passing on that wealth. Data shows we are the third from last when it comes to wealth inequality thanks to high home ownership rates. If we look at the past, it shows that it does augur well that it could happen again. The more we strive to ensure we have a supply of affordable accommodation; this process will continue.

Do you feel there should be direct government intervention in the property market so that rent and purchasing prices are regulated? In a country like Malta, where property comes at a premium, do you not feel the need for more active involvement by government in the sector? 

I think unfortunately the country’s experience with severe regulation of rental prices has left a bitter taste when people hear about price regulation. If someone presents enough solutions such as supply of affordable housing, a planning policy which facilitates certain housing models which appeals to different sectors in society, solutions can be found.

But we barely have a planning policy in the country… 

I am speaking about affordable housing, and how it can offer solutions. I think planning policies across Europe have worked and offer solutions, and I think the time has come to discuss a use-class dedicated to affordable housing, as I believe it could present a number of solutions.  

But apart from all that, we can also speak about the financial sector, where gaps still exist, which if exploited could be investment alternatives for local investors who are interested in investing in social projects. That panorama of solutions can ensure the varied demand in the country can be serviced.  

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I feel the more we cater for the different needs of society, the more we ensure that everyone is provided with accommodation which meets their needs. It might be that the supply of property in the market still reflects the realities of 20 years ago, and not adapted to what society needs today.