Malta’s empty houses up by massive 36% in six years

The extension of development zones and the increase of height limitations in 2006 has contributed to a massive increase in vacant properties, which have shot up from 53,136 in 2005 to a staggering 72,150 in 2011, official census figures released to MaltaToday by the National Statistics Office show.

Vacant properties had already increased by 17,000 since 1995. This means that since 1995 the number of vacant properties has doubled.

The census also shows the percentage of vacant dwellings rising from 26% in 2005 to 32% in 2011. The census registered 153,100 occupied dwellings, meaning that there is one vacant dwelling for every two occupied ones.

MaltaToday is informed that the final report of the census, to include a report on dwellings, will be published in the coming weeks. Work on it has reached the final stage.

The census will confirm the 70K figure cited by Alternattiva Demokratika over the past two years. Although correct, the figure has never been confirmed officially.

The publication of the census data coincides with the new government's decision to revise the 2006 local plans and increasing concern that it intends to kick-start the economy by encouraging more construction in Maltese towns and villages.

The government has also announced plans for land reclamation and has not excluded that this could include a real estate component.

"It is worrying to hear Malta's top authorities are still speaking about the need to reclaim land or build higher when neither is needed, since Malta has such a large number of empty residential units," FAA Coordinator Astrid Vella told MaltaToday this week.

Huge increase in urban residential areas

This 72,150 figure does not include garages and boathouses but includes summer homes, which are vacant for most of the year.

In 2005, the number of holiday homes which were occupied for some time during the year stood at 10,028, which represents only 19% of vacant properties in Malta. Since the number of holiday homes tends to remain stable over the years, the increase in vacant properties is likely to have come about as a result of new construction. This is confirmed by an increase in vacant properties in relatively new urban residential centres.

The statistics show that the sharpest rise has occurred in both rural localities like Mgarr and affluent middle-class localities like Attard, Swieqi, Gharghur and Naxxar. But a sharp increase has also been registered in southern and working-class towns like Luqa, Fgura and Zabbar.

In Attard, which has seen an onslaught of new construction in the past years, the number of vacant properties has nearly doubled, from 412 to 799 between 2005 and 2011.

St Paul's Bay, which had 4,467 holiday homes in 2005 still accounts for the highest number of vacant dwellings: 10,453. This means that in just six years, the number of vacant properties in the northern seaside town has shot up by 1,691.

Paradoxically, St Paul's Bay also saw the highest number of new planning applications (1,230) between 2008 and 2013. Sliema, which saw 852 new applications in the past five years, registers the second-highest number of vacant properties: 4,061. Between 2005 and 2011, vacant properties in Sliema shot up by 1,394. Mellieha, where 460 new apartments are being proposed in the Ta Masrija quarry, already has 3,015 vacant properties.

In Gozo the largest number of vacant properties is found in Zebbug, which includes the Marsalforn holiday resort. In Zebbug the number of vacant properties has shot up by a further 28% to reach 3,409. Victoria has also registered a sharp 43% increase in vacant properties. In the Gozitan capital, 1,401 properties are now empty.

Chronicle of a building boom gone wrong

Between 2000 and 2010, 75,000 new dwellings were permitted by MEPA, though the projected demand during the same period was set at 21,700 units. Another 53,000 dwellings lay vacant in 2005, naturally confirming the oversupply of land for housing.

Moreover, 34,146 new dwellings were approved between 2005 and 2008, after building heights were increased and new local plans and development boundaries introduced.

The number of permits for new dwellings shot up from just 2,994 in 1998 to 11,343 in 2007 - an increase of 293%. The greatest increase was registered in the number of apartments approved by MEPA, which went from 1,651 in 1998 to 10,252 in 2007, an increase of 521%.

MEPA data indicates that apartments accounted for 64% of all new dwellings permitted in 2000. This proportion rose to a staggering 90% in 2007, then decreasing to 84% in 2010.

The year 2005 represented the turning point for the property market, which was flooded by new applications.

In that year alone the number of housing units constructed increased by 35%, from 6,700 to 9,000, and despite the increase, prices skyrocketed by 40% relative to 2003 for apartments and by 35% for two-bedroom maisonettes, according to the Building Consultative Council's annual report.

This coincided with Malta gearing up for adoption of the euro, when more people started channelling their undeclared money into property development, fuelling a spiral in property development between 2005 and 2008.

The building industry slowed down following 2008. The number of planning applications validated by MEPA fell from 6,008 in 2008 to 3,200 in 2012. The major dip in new applications occurred between 2010 and 2011, when the number fell from 5,300 to 2,748.

While partially this was brought about by the economic slowdown it also coincided with increased vigilance against overdevelopment in sensitive areas and increased scrutiny brought about by the appointment of full-time MEPA boards, which took a decisively less liberal approach to permits. Along with higher planning fees, this was cause for disgruntlement among the developers. During the election campaign the Labour Party pandered to this lobby, promising to lower tariffs and reduce "bureaucracy" in planning.