The property industry is currently one of Malta’s strongest and contributes significantly to our economy - with an annual turnover of over 3 billion euros in the last year alone, it is no wonder why some seem to hail the real estate market as though it were indestructible.
However, it was not always that way. Sitting down with Chris Grech, one of the founders and directors of Dhalia Real Estate, we travel back in time to the company’s (as well as the market’s) humble beginnings to understand more about where we began and reflect on where we need to go to maintain the industry’s success. At the time that Dhalia Real Estate was founded, in the 80s, the culture surrounding real estate was quite different to the fast-paced and competitive one that we can acquaint with today.
“Estate agents carried a very small percentage of property deals on the island”, Chris recalls. “Most of them used to work half-days only because there wasn’t that much work for them [at the time] [...] the property market was completely dominated by village brokers”. Village brokers acted as the intermediary between foreigners and locals, specializing in their localities, and greatly influenced the beginnings of the real estate industry and its standardization. The majority of clientele, as well, were foreign.
The local market was kept separate from the foreign market in a majority of cases, as the locals selling to locals was kept by village brokers. After a prosperous period in the 60s and 70s where many British people took up residences or holiday homes on the island, the political climate of the early 1980s had a significant effect on the real estate market at the time, and Malta had taken a hit in its popularity amongst the British.
As Chris recalls: “A lot of the British were starting to move out. Part of it was for political reasons, because there was hearsay that the government at the time were against having the British over here, and another part of it was purely because there was no more demand. Malta lost a bit of popularity in that period of time.” Prices, also, were very different to what we are familiar with now. “It was a period where supply exceeded demand to such an extent that prices were low.” Prices of unconverted farmhouses, and properties with land, were as little as a few thousand pounds. However, the change of government in 1987 brought a welcome change to the practice of real estate on the islands.
“Hype started to build up in the business community, and there was a huge amount of interest from overseas and from the Maltese.” The government’s initiative to improve relationships with the rest of Europe and the US brought this about. Advocacy for a membership application in the EU also added to this sense of rejuvenation and hype. The role of estate agents also began to change, as they “[got] more involved in the Maltese real estate market.” This brought about the beginnings of the boom in real estate.
The role of broker was replaced with the growing role of real estate agents due to the increased interest in the industry and in our property, and most importantly, with the rise of the internet and technology which led to the importance of data and which made it easier to promote Malta abroad. A balance of local and foreign interest was key to the success and growth of the market. Malta joining the EU also greatly affected Malta’s property market and the real estate industry. “The EU really put us on the map. A lot of people just didn’t know about Malta. We become a product available for the whole world.” This interest resulted in more developments, which was accompanied by poor planning, and a lack of sensitivity to our island’s environment - something we are paying the price for presently.
“There weren’t any restrictions in those periods”, Chris reflects. The actions of the predecessor of The Planning Authority, known back then as the PAPB, led to “a lot of infrastructural damage to the island where buildings were converted badly, were constructed badly, [and] there weren’t any lobby groups at the time to protect our buildings.” The process of buying or selling a property has also changed immensely. “In the 80s and 90s, when we used to sell our property, we used to go, show somebody a property, and within a week you’re signing the contract.”
The Promise of Sale Agreements was not standard, the notary’s role was very different, and procedures in many aspects of the property purchase process were lax. “People could basically do what they want, but over the years it’s become much more professional and much more accountable.” Presently, however, Malta’s real estate market is working on its accountability, regulation, and professionalism. The market is currently implementing regulation measures that will ensure all practising real estate practitioners are licensed by the end of 2021.
“So today the real estate industry is becoming much more professional, accountable and more in line with what the customer needs, especially because it is both a local and a foreign market”, Chris asserts. This modernization does come with some complexity - “it’s become much more complex because of our bureaucracy.” Buying and selling property has evolved to include several checks to be done by notaries, a considerable amount of documentation, the need for bank loans and the implementation of anti-money-laundering measures to ensure a successful sale.
Fortunately, this is met with agents and practitioners who are either refreshing their knowledge or learning the skills needed to work in the real estate industry. “The authorities heard our calls to make sure that the industry is regulated, that property consultants are accountable, that we provide a professional service, and that we are responsible for the service we provide.” The call for quality properties is also being felt by the real estate industry. “Now, our standards are starting to improve, even with properties now which are not that expensive”, Chris asserts.
However, there are a few issues that the industry as a whole needs to focus on regarding its future. Standards are improving, but this is only the beginning of a much-needed change to the local attitudes regarding land use and developments. “We’ve had a major improvement in our standards, but we still have a way to go - there is a lot of room for us to improve our standards, especially with our infrastructure”. Maintaining that need for quality and the improvement of urban planning cannot be done by the industry alone - the voice of the people will be critical in these efforts.
“Over the years, the Maltese opened their eyes and these lobby groups started to get stronger and stronger [...] proper, professional urban planning is something that we missed out on and that we are trying to correct.” The real estate industry is a growing, prosperous industry that has transformed into a powerhouse. But with history comes lessons, and with lessons come the opportunity to create a better future for ourselves and the next generations.
Chris Grech is the founder and executive chairman of the Dhalia Group of Companies.
Dhalia Real Estate was founded in 1982 and today is one of Malta’s most successful and dynamic real estate organisations. In 1986, Dhalia Investment and Dhalia Developments were formed as the investments and development arm of Dhalia Group. The Dhalia Group incorporates a portfolio of property investment and developments, as well as fourteen real estate offices in Malta and Gozo.
In 2005, the group embarked on an ambitious project in Bulgaria. Today, Chris is also Chairman and CEO of Balkan Jewel Resort. This is a four-star mountain hotel resort, having collaboration agreements with the largest destination and tourist companies in the world. Chris is also a member of the Chamber of Commerce on Sofia Bulgaria.
Chris also helped to develop Malta's cultural community when he served as Chairman of St James Cavalier for a three-year term upon its opening in 2000.
DISCLAIMER: The content of this article does not necessarily reflect or represent the views and opinions of The Malta Chamber of Commerce, Enterprise and Industry.