Malta’s economy has been growing steadily and at impressive rates in the last few years. Like so often, this has been orchestrated and facilitated by a few clever policy moves. And also, as it happens frequently, the phase where physical reconstruction sets in, is stressful to the inhabitants, and besides all the improvements and advantages, bears the risk of falling victim to the own success. There has been a discussion on a property bubble building up, and experts say, as long as the influx of well-paid buyers continues, things there will be a soft landing. Not quite sure, where we land though. But I hear the message. Currently, vast amounts of residential units are in the pipeline and will come to the market in the next few months or year. Asking prices jump up on the rumour that somewhere else the price was jacked up 20 %. Transaction prices are opaque because they are not published. Construction quality is generally low, and architectural finesse is often that of garages, which is painful to see in the otherwise charming heritage of Malta. Meanwhile, yes, companies are moving into Malta - still mainly for regulatory loopholes and tax purposes - and some as an effect of Brexit. Primarily these are service companies which do not need much technical talent. But still, it is hard to fill positions locally. Low education levels and inefficient unreliable work culture make Malta a tough hiring place. And then, beside the shortcomings in capabilities, Malta currently has a massive lack of infrastructure. It is worked upon that, but it will take time. Luckily, many Maltese buy their properties in cash and should there be a downturn this would not put the stress on the banks. But still, as there is not that much corporate lending in Malta, the books of banks are packed with mortgage loans and not very diversified. Should a property bubble burst, by people not coming anymore, or an otherwise induced economic downturn, then we would have all wished the economy of Malta would have had a few more dimensions. But luckily, so far, all is going well. Construction is a bit annoying. It changes the character of the island state, for the good and the bad. I also share the fear that the natural environment is suffering. In the end, a lot of the residential developments look a bit like there is not much oversight. And unfortunately, Malta seems to have not much of a vision, of what it wants to become. That may be why a lot of developments look somewhat inconsistent to me. But let me see what comes out. In the end ther is not much else we can do than folloing the bubbles.
Birgu is one of my favorite places. It is one of “The Three Cities” and it is mainly up to the local community that it is preserved and cultivated tastefull. That’s not the norm in Malta, unfortunately. This building is one of my favorites on my way home from the Birgu central square.