Well attended first-ever property valuation workshop highlights its importance for economy

The first-ever worksop on property valuation held in Malta was a well attended affair that aimed to update local stakeholders from different sectors on the latest international developments on property valuation while emphasising the role of valuations in property investment and pricing-to-market, bearing in mind the local context.

Property Valuation: A Practical Approach was held on 18th April 2023, organised by the Malta Bankers’ Association (MBA) and Archi+, in collaboration with il-Kamra tal-Periti (KTP) and supported by Bank of Valletta.

The workshop commenced with an opening address by the chair of the MBA, Marcel Cassar, who highlighted that property markets are an important barometer of macroeconomic and financial stability, and that real estate price cycles have a profound impact on the economy and the financial system.

As he explained further, Mr Cassar stated that: “Real estate construction and related services make up a significant share of many economies, including Malta, while the financial sector, and in particular banks, have a primary role in financing real estate investments.”

Addressing the matter from a banker’s perspective, Mr Cassar said that: “In 2022, bank mortgage loan portfolios exceeded 200 per cent of banks’ CET1 (core) capital in most euro area countries, and loans to companies engaging in real estate activities are also of significance in several of them.

“Moreover, real estate properties are a very important storage of wealth for households, worth more than 200 per cent of GDP in most euro area countries.”

He also emphasised the importance of property valuation in Malta in the light of data showing that Malta outpaced other EU countries in the Eurostat house price index, the potential undervaluation of property prices in certain regards as highlighted in the Central Bank of Malta’s House Price Misalignment Indicator, new factors in property valuation such as the energy performance of buildings, and further questions pertaining to valuation in Malta’s densely built market.

Professor Nick French, a leading valuation expert and academic from the UK, was the main speaker at the workshop. He delivered various presentations on a number of topics such as the concepts and definitions of price, worth and value; the distinction between property market value and prudent value; valuations for secured lending, and valuation approaches, methods and models applied to real estate pricing, among other topics.

The workshop was slated to include a panel discussion on the theme “Valuation and Market Pricing”.

The panel, which was to be moderated by Justin Mizzi, a property valuation expert at Archi+, would also have included Prof. French, Denis Camilleri from DHI Periti, Glynn Drago from Bank of Valletta, as well as Alan Cassar from the Central Bank of Malta.

However, due to time constraints, the organisers announced that the panel discussion will be held online in the near future.

The event ended with a closing speech by Perit Andre Pizzuto, President of the Chamber of Architects.