From July to September 2023, the number of approved building permits went down by 13.9 per cent when compared to the same quarter of the previous year.
This translates into 384 approved building permits for the period, amounting to 1,827 new dwellings, figures released by the National Statistics Office show. When comparing the number of approved new dwellings from the same period last year, this saw a decrease of 13.9 per cent.
Building permits are authorisations to initiate new building projects, and, the objective of the NSO’s statistics in this regard is to indicate the future development of construction activity in terms of the number of approved new dwellings. These figures do not include commercial development applications.
Most new dwellings approved during the third quarter of 2023 were apartments (1,337), followed by penthouses (276), maisonettes (141), terraced houses (61) and other residential units – which includes bungalows, farmhouses and villas (12). Apartments accounted for 73.2 per cent of the total number of approved new dwellings.
In building-frenzied Malta, residents and businesses alike have decried the ongoing development and construction works which has left all corners of the island dusty, loud and generally unpleasant for several years.
And, while the active construction sector has been described as a main driver of the economy, supporting Malta’s population growth and the increased economic activity that comes with it, the recent cost of living crisis and severe supply chain disruptions have left some developers over-exposed, according to RE/MAX Chairman Kevin Buttigieg, who made the assertion while taking part in a popular podcast produced and hosted by Jon Mallia.
Turning to the property market in general, Mr Buttigieg claimed that developers are facing increased pressure to repay their loans due to a situation where they are not selling enough of their stock while building costs continue to shoot up.
He went on to illustrate his point by saying that developers who bought a site two years ago are facing increased building costs by 30 to 40 per cent, leaving developers in the lurch.
Mr Buttigieg said in his own experience, he is currently building five flats and a penthouse on land that he owns. He recently had to cough up an extra €15,000 per flat to build extra steel structures, a prime example of a building material that has seen an increase in price.
Meanwhile, Government – perhaps in a sign that it is acknowledging the troubles being faced by the industry – recently introduced a legal notice extending planning permits due to expire by December 2024 for three years. In 2020, a similar extension was granted due to COVID disruption, while this latest extension is said to be taking place because of the supply chain issues and trouble sourcing raw materials faced by developers between 2022 and 2023.
Expectedly, the Malta Developers Association welcomed the last extension, stating:
“This extension offers much-needed relief to permit holders, reducing the pressure to commence their projects hastily and eliminating the need for more third-country national persons to work in the construction sector, aligning with broader objectives of workforce management.”
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