Wish you were here

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Malta is one of Europe’s most densely populated countries. Official statistics state that 1,300 persons live within every square kilometre of the Maltese islands. While being a densely populated island state, Malta has still successfully carved a niche for itself in recreational property sales among foreign buyers.

Recreational properties are considered as second homes. Driven by lifestyle motivations, people from the northern regions of Europe and North America are increasingly acquiring properties in warmer destinations. Apart from Malta, other popular destinations considered in the Mediterranean region include Majorca, Corsica, Sardinia, Sicily, Corfu and Cyprus.

The Property Acquisition Process

Basically there are three stages of the property acquisition process. Firstly the need recognition, followed by the research and  evaluation stage, and finally the decision-making and post-acquisition stage.

From a marketing point of view what is the main motivator to encourage a potential buyer to invest in a recreational home? Why choose Malta and not somewhere else? Common motivators revolve around the ability to acquire a ‘better life’. Sun and sea are certainly two important factors offered by Malta even though other locations across the southern European coast can offer the same.

English as a common language in Malta is also another plus. But then isn’t that the same for places such as Gibraltar? Even places like Corfu and Majorca are developing their English speaking skills with the increasing popularity of British arrivals.

That is why even though product Malta can seem attractive and practical, more physical and emotional assets need to constantly be developed to strengthen the psychological pull of investing in a recreational property in Malta.

Obviously buying a property is not like purchasing a beverage from a vending machine. Everybody would love to have a recreational home but different buyers have different budgets and expectations. That is why potential buyers will research and evaluate their options. A positive visit to Malta will certainly help but investing in Maltese property is no longer the steal it used to be. With premium pricing of quality recreational homes in Malta becoming the norm, buying property is certainly not an impulse decision. Hence realtors need to appreciate that buyers will do their own proper research, look around and match and compare online.

Research has shown that buyers viewed their relationships with the estate agent as significant, and generally placed a high degree of trust in and dependence on that relationship, sometimes even leading to ‘moral obligations’ regarding the agent’s advice. Therefore the role of the real estate agent is not something to be ignored.

The role of the agent is to capture the imagination and expectations of the buyer and match it with what is best available on the market. Only by being candid and trustworthy can the agent successfully fulfil the desired match and secure the sale. On the other hand the real estate agent has to realise that buyers will try to go solo and search on their own. Therefore the agent needs to convince the buyer that only through an agent can they find their dream property.

The last stage of the property acquisition process is the final decision made to purchase the property and the post-acquisition term which will confirm if the buyers’ investment in Malta was the right decision. This stage is certainly important as it closes the deal but one must not underestimate the enthusiasm of happy buyers that can churn new potential buyers among their family, friends and co-workers. On the other hand it’s important for realtors to realise and understand the reasons why a buyer might reconsider their relocation to Malta and decide to move elsewhere.

Product Malta

Malta is a dynamic destination. Apart from the wonderful sun and sea, the island is home to an abundance of cultural heritage. While we do tend to show dissatisfaction in our limited entertainment options, Malta truly does have a busy cultural calendar. And even though our Mediterranean blood gives us a tendency to huff and puff about everything that bothers us, the Maltese are still very kind, generous and hospitable people. Malta’s educational facilities should not be underestimated while the islands are supported with a reliable and advanced health system.

Considering Malta’s geographical vicinity to Tunisia and Libya, Malta is still a very safe place. It’s a great place to bring up children in a quality environment and to wind down, retire and enjoy a Mediterranean lifestyle. Research also shows that the availability of low-cost airlines makes a destination more attractive as airline links to major cities are convenient and affordable.

All these attributes create a compelling proposition for any visitor choosing to reside in Malta. While one of the problems is that we try to be everything for everyone, living in Malta is enjoyable, safe, and rewarding. Integrating with the local community is also possible as foreigners are accepted and become part of the social fabric of the locality.

Promoting Malta

While the remit of the Malta Tourism Authority is to promote Malta as holiday destination, its role does not include the promotion of Malta as a place to invest in a second home. On the other hand

Malta Enterprise is the government agency which promotes foreign direct investment but once again its remit is not to promote recreational properties as a long-term investment.

Therefore while government agencies do try to collaborate and support indirectly the real estate industry in Malta, most real estate agents have to coordinate their own initiatives to reach out to potential buyers. All this comes at a cost which can be a considerable investment.

Several real estate agents and developers have taken the initiative to visit and participate industry trade fairs on the main continent. Advertising in niche publications especially in the UK is also a common practice. But still a lot more can be done through online content and promoting success stories about those who have happily settled down in Malta.

Also one should explore the possibility where stakeholders collaborate together to promote Malta as the ideal place for a recreational property investment.

Challenges Continue

Like any business activity, challenges will remain and persist. The obvious challenge in Malta is the scarcity of land to develop and how efficiently and sustainably it’s utilised and developed in the long-term. Real estate can no longer be a speculative affair. While property investment for developers is a short term game, a long-term approach is needed to holistically sustain Malta as a valued real estate investment proposition.

Finding the right buyers is another challenge. In the past real estate agencies were mainly inward thinking and not much effort was put into reaching out to external buyers. Leads would mainly be generated through daily walk-ins by tourists who would be visiting Malta.

A lot has changed as many independent and franchised real estate agencies have set up base in Malta. Therefore those who solely depend on walk-ins will have limited potential to sustain growth as the competition is tough and properties are listed with multiple agents.

Therefore real estate agents need to internationalise their networking to not only rely on walk-ins but reach out to potential buyers who might have not even set foot in Malta.

Developers also have a crucial role in enabling the right mix of properties available for sale in Malta. Gone are the days of lumping garages and apartments in a plot or reinvigorating townhouses into rustic and authentic homes. Developers need to adapt to market needs which are constantly evolving.

Preserving the quality of life goes hand in hand. Without it developers would be purely destroying the recreational element of an investors’ second home from home. This needs to be supported by continuous investment in infrastructure, cultural activities, the environment and safety.

One of the biggest challenges for Malta has always been about global awareness. Malta has limited resources compared to major nations to stand out and be noticed. This has practically always been the case for tourism and foreign direct investment. Upcoming events such as CHOGM, V18 and Malta’s chairing of the EU Presidency will provide prominence to Malta on the international media. Such events are opportunities to capture the imagination of potential buyers.

Traditional markets such as the UK and Italy are no longer the predominant source of buyers. Apart from the increasing interest from Nordic countries such as Sweden and Norway, new target markets such as China, Russia, and the UAE are steadily developing. With new buyers coming from non-traditional regions comes the need for a gradual adaptation in consumer behaviour and habits.

The Little Nation That Could

Visitors to Malta find it rather impressive how we have lumped all the necessities and qualities of a big nation into a small one. Malta and Gozo have a lot to offer for many types of buyers for many reasons. This can only be sustained by preserving our quality of life.

Foreign buyers value Malta’s lively and vibrant environment. Convenient distance but a not too crowded environment is also valued where one has the option to participate in central city life or reside in calmer areas. Foreign buyers of recreational homes praise the calm and silent environment of our quaint villages. This is where they discover and enjoy a traditional lifestyle while avoiding the mass tourism feeling.

It’s the simple things that matter, small qualities which make Malta an authentic place to live. We must never fail to appreciate the sheer beauty of simplicity. There is nothing wrong with being bold and ambitious but we should never forget our roots and humble origins.

This article was published in MONEY Magazine (July 2015).