Does perception play a role in defining property prices?
Although tiny, Malta often gets divided into ‘the North’ and ‘the South’ – but does this apply to real estate market?
Back in 2009, a National Statistics Office study confirmed that the divide in Malta between ‘the North’ and ‘the South’ was not only something perceived in the minds of the islanders, but an actual divide that related to the number of single and unmarried parents, the number of people on unemployment benefits, the number of low-income earners and where they lived.
In more ways than one, the eternal discourse surrounding ‘the North’ and ‘the South’ had finally found some scientific grounding, but many can still argue that this divide, in reality, does not exist. Meanwhile, can divide as such affect the Maltese real estate market in any way? And, if yes, how so?
Perception: If an area is perceived to be less desirable than somewhere else then the property prices in that location will automatically be perceived to be lower, and less desirable. This is not to say that ‘the South’ is less desirable than ‘the North’, or vice-versa but if people perceive it so, then buyers are less likely to go shopping for property there, thus halting the economic growth of an area where property developers will show less interest in building and forcing sellers in that particular area to lower prices.
Location: This will always be one of the main factors that affect a property’s price tag, but the problem with location is that it is created not only by the geographical position of a place but also, and more importantly, its perception. Nevertheless, it is common knowledge that recent developments such as St. Angelo Mansions, Cottonera embellishments, as well as many other developments located in Birgu and Marsaskala have created a huge stimulus in this Market. Ta Monita is a very sought after property development in the South.
Neighbourhood: Neighbours and neighbourhoods can have a massive impact on whether someone actually buys a house there or not. People tend to purchase a property close to their friends or where there social circle think of as being ‘adequate’ – markets can be divided within a town as well. The exact same apartments located 500 metres apart in Sliema may also be priced differently.
Prices: Until a few years ago, prices for houses in certain areas of ‘the North’ were much higher than those in the most desirable areas of ‘the South’ – but this has, to same extent, changed. Finding a gorgeous farmhouse or seafront penthouse in ‘the South’ is easier than most people might think and they might actually cost more than some high-end places in ‘the North’. Price tags add to a property and an area’s allure, and that drives buyers to move to formerly less-desirable areas.
It is always recommended to seek advise from a professional real estate agent. Without an estate agent you’ll never know what’s planned to be built next door, or what one may expect until you move into your new dwelling. Professionally trained estate agents have resources to check planning permits, understand markets and will guide you through through each process.