Malta saw highest EU increase in building permits in 2022

Malta registered the highest increase in building permits issued in 2022 from all European Union member states, according to figures published by Eurostat.

The EU’s statistical office reported that Malta experienced a 29.4% increase in building permits last year, while on average the EU experienced a decline of 4.5%.

The number of building permits issued decreased in 18 EU states, while the number rose in only nine countries including, Spain, Croatia, Bulgaria, Italy, and at the top of the table, Malta.

The Planning Authority, which is the entity tasked with accepting or denying building permits, has recently been at the centre of widespread frustration, even culminating in a national protest which drew thousands of people demanding planning reform and an end to environmental destruction.

Responding to questions by MaltaToday, Malta Developers’ Association (MDA) president Michael Stivala and economist Stephanie Fabri were in agreement that these statistics are a symptom of an economic model based on growth and volume.

They highlighted that such figures can only keep growing if Malta’s economic model remains unchanged. Earlier this month, Finance Minister Clyde Caruana warned that Malta’s population must grow to 800,000 by 2040 for the current economic model to be sustained.

Michael Stivala and Stephanie Fabri agree that Malta’s spectaular increase in building permits when compared to its EU counterparts is the result of ‘growth and volume’

“The real estate market responds to the market demand, and if the current economic model is based on growth, demand will also grow,” explained MDA boss Michael Stivala, as he highlighted that in a number of sectors, many employers are still in need of workers.

Stivala stated that he is in favour of “tweaking” the current economic model, which has been a goldmine for the local construction industry over the past decade. “Economic growth is important, but we should start shifting to quality over quantity,” Stivala said, as he called for a national discussion to find an alternative economic model which depends less on volume and more on value.

This, however, will be no cakewalk, explained the construction magnate, as government must also juggle external factors that will impact the national economy in the future, such as the minimum corporate tax, the war in Ukraine, and recession in the Eurozone. Urging caution and gradual change, Stivala warned that such a shift in the national economic model should take into consideration various risks, so as to avoid situations of mass unemployment.

Meanwhile, economist and academic Stephanie Fabri also claimed that “Malta needs a holistic national vision that is supported by the underpinning strategies.”

Describing the increase in building permits as a result of economic growth, she stressed that such a national vision should be “based on the ESG values to ensure that there is a solid governance system supporting that model, and that the environment and society are protected.”

According to Fabri, the discussion and vision for the economy is crucial, and only this should allow markets (such as the construction and property market) to act accordingly. Additionally, Fabri stated that only when such a vision is communicated to stakeholders, “we can then discuss how much to build but most importantly ‘how’ do we need to build to respect the social and environmental wellbeing of Malta and its people.”