PwC Malta Releases Report on Maltas Performance in the Global Real Estate Transparency Index

October 19 2024 07:44:06 by PCLMedia

PwC Malta recently published a report assessing Malta’s ranking in the Jones Lang LaSalle (JLL) Global Real Estate Transparency Index (GRETI), which revealed that Malta continues to be categorized among the countries with "Low Transparency." Despite some improvements in certain areas, Malta remains behind other European nations in terms of real estate transparency, underscoring the need for further reforms and improvements.

Over the past several months, PwC Malta collaborated with JLL and Archi+ on Malta’s second contribution to the GRETI. The report, part of an ongoing effort to evaluate and improve transparency in Malta's real estate sector, highlighted that the country has been assigned a score of 3.54. This placed Malta in 58th position out of the 89 countries assessed, including EU nations like France, the Netherlands, Germany, and Sweden, as well as non-EU countries such as Mauritius, Puerto Rico, Morocco, and Botswana.

Transparency Gaps and Areas for Improvement

Malta’s score and ranking in this year's GRETI remain unchanged from the previous edition, keeping it within the "Low Transparency" bracket. Although Malta performed well in several key areas, including governance of listed vehicles, regulatory and legal frameworks, and the property transaction process, it struggled in other aspects. The country's lower scores were particularly notable in areas such as sustainability, the integration of technology and digitisation in real estate, and the availability of comprehensive property data.

Transparency is crucial for international real estate investors, as markets with higher transparency tend to be perceived as less risky, offering better governance and reducing the potential for reputational and financial risks. PwC’s report acknowledges that Malta’s transparency in governance and regulations related to listed vehicles and real estate transactions is commendable. However, there are critical deficiencies, especially in the provision of reliable and accessible data, and in implementing technologies that could modernize the real estate sector and make it more competitive globally.

The Importance of the GRETI for Malta

The Global Real Estate Transparency Index, published biennially by JLL since 1999, evaluates real estate market transparency in countries around the world. The Index scores property markets on a five-point scale ranging from "Highly Transparent" (1) to "Opaque" (5). It serves as a vital tool for companies and investors operating in foreign markets, offering a clear benchmark for assessing transparency in real estate transactions and investments. Malta has only been included in the GRETI since 2020, making this its second evaluation.

PwC Malta has been central to Malta’s contributions to the GRETI, leading consultations with public and private stakeholders such as real estate investors, developers, architects, lawyers, real estate agents, and property managers. The areas assessed in the Index include property data availability, real estate technology, construction practices, real estate taxation, land use planning, and sustainability initiatives. These areas play a significant role in determining transparency, which in turn affects investor confidence and the growth of the real estate market.

Call for Greater Transparency

David Valenzia, PwC Malta’s Territory Senior Partner, emphasized the importance of improving transparency to attract more investment. "It is clear that real estate investors gravitate towards more transparent markets with more robust regulatory systems and lower reputational and financial risks. Real estate is an important investment instrument locally, and the gradual improvement of real estate transparency will continue to ensure the sustainability of the industry."

Valenzia also highlighted that the GRETI results offer a roadmap for the country, identifying the areas in which it must focus its efforts. "The results of this survey continue to highlight the areas the country needs to prioritise to move forward and increase transparency. It is only by working upon identifiable targets that Malta can improve its score and ranking in JLL's GRETI," he concluded.

The Path Forward: Transparency as a Key to Growth

Improving real estate transparency in Malta is not only important for investors but also crucial for the long-term health of the real estate sector. Greater transparency can help mitigate risks, enhance regulatory frameworks, and provide clearer information for decision-making by local and international stakeholders. As PwC Malta’s report indicates, prioritizing sustainability, integrating technology, and improving data accessibility are among the key steps Malta must take to enhance its real estate market.

Additionally, transparency plays a vital role in promoting fair competition, fostering trust among investors, and ensuring a more equitable distribution of opportunities within the sector. For Malta to improve its standing in the GRETI, stakeholders across the industry—public and private—must collaborate to address these deficiencies and implement changes that can elevate the country's market transparency to a higher level.

In conclusion, while Malta's real estate market has made some strides, significant gaps remain, particularly in modernizing the sector with technology and ensuring the availability of comprehensive data. As investors increasingly seek out transparent markets, enhancing Malta’s performance in future GRETI evaluations will be critical for attracting investment, fostering sustainable growth, and ensuring the long-term competitiveness of the country’s real estate market.