Housing. This is an issue I’ve blogged about multiple times. It’s an issue that affects a major percentage of our population, both young and old. In this blog I want to take a look and try to analyse what’s going on, let me begin by saying I’m not a property expert, I’m not an investment expert nor am I someone with all the answers, what I want to talk about is how this is affecting us as a community.
Property development is rife in Gibraltar, just take a walk or, the favourite national pass time, drive around and you’ll spot all the new developments being built and the areas earmarked for new developments, lets list them (at least the one’s I’m aware of) and put it into perspective:
Ocean Spa Plaza
Prince Edwards Gate
It’s entirely possible I may have missed some but I’m sure you get the picture. Some of those are exclusively geared towards “CAT2 or High Net-worth Individuals”, whilst others are brand new and geared towards investors. So, it’s a fact, properties are getting built and developed despite Brexit looming, so what’s the issue? Prices. The property prices in Gibraltar are super inflated. From that list, it’s very unlikely that the average person working and living in Gibraltar can afford any of those, but then again, those are not geared or marketed towards people here. Have a look at any of their websites and the marketing trends seem to be about “Affordable Luxury”, “Modern Living”, hell even Studio apartments are being called “Executive Studios” these days, because you know, we live in a world where people need their ego’s stroked so badly that we’re calling a room with a bed, toilet and a kitchen an “Executive Studio” as opposed to a “Studio Apartment”.
Aside from all that marketing buzz, these properties are also marketed as “the perfect investment to add to your portfolio” for example:
So, what are we doing? We’re selling off land to property developers who are in turn building properties targeted at rich foreign investors who are purely getting a property to expand their investment portfolio and, in the process, saving money on tax and are most likely not even going to live in these properties. I also ask myself, is there a darker side to all this? It’s no secret that in London for example there are faceless shells buying properties purely to launder money.
All of this has a knock-on effect on Gibraltar and the people who actually live here. The rental market is pretty much un-affordable to anyone who isn’t earning £1900+ or are lucky enough to also have a partner that also brings in an extra £1000+ at the end of the month. The resale prices on properties shoot up and suddenly, it becomes the norm to see a three bedroom flat go for over £400,000 and the worrying part is that the trend doesn’t seem to be slowing down, it seems like every other month we see a new development getting announced and the prices on resales getting higher. It just begs to ask the question if the current generation are having these issues, what will the children of today do 20 years down the line? And also, what about the elderly? People are now living for longer than ever and we need to plan ahead for our ageing population.
Estate agents will speak up, blog, and generally glorify how fantastic the property market in Gibraltar is and of course they will… because through hard work and perseverance they’re obviously making A LOT of money on every sale, resale, rental, commission etc… The Government and the finance centre will say, “It brings in money to Gibraltar” but at what long term cost? Isn’t it time to think outside of the box a little and analyse what this means for the future and how we can redefine ourselves?
By all means, lets welcome genuine people who want to come, settle down and work in Gibraltar. But outside of the self-interest of a handful of rich real estate agents and property developers, there is no reason we should keep selling off the little land we have to allow ultra-rich investors to save some money on tax — badly distorting the housing market for actual Gibraltarians in the process — for their own greed and nothing else.
At the moment, many families and people’s lives continue to be on hold as they have no chance of being able to purchase or even rent a property here. The current Government announced two (which most recently became three) new 50/50 property developments, which realistically, is the only chance many will get at buying a home here and being able to settle down. The whole thing so far has been a bit of a PR disaster so far in my opinion. Bob Peliza Mews and Hassan Centenary Terraces were first announced in AUGUST 2015 and we’re about to head into 2019 and not a single thing has happened. In Parliament when asked what is happening, the usual reply is #Shortly more will be revealed or in “Summer” or “Enter Season Of Choice Here Without Specifying Year Here” … I think the latest on it is that a new announcement will happen before Christmas and don’t get me wrong, it’s fantastic news that new 50/50 developments are being built as it will allow people to construct the foundations of a bright future for themselves and their family. Finally, hopefully we’ve also learnt our lesson and the leases on these new flats are changed so they don’t allow people to end sell a tax payer funded flat that may have cost the purchaser around £150,000 (Or half if they choose 50/50 ownership) to sell them for massive amounts of profits like we’ve seen in Waterport Terraces (there are even some properties there which are still completely vacant and are obviously being used for profit…) and most recently, Beach View Terraces.