Monday, January 31, 2005

Property market set to adjust, says local expert

Finance Centre & Govt Housing

Properties designed for high net worth individuals – the so called luxury market – will stop their furious price hike and stabilise as that market adjusts to the apparent shrinkage of the finance centre. That is the view of veteran property expert Momy Levy who also says that local property prices, those aimed at the Gibraltarian market, are currently over-priced.

The recent news that exempt companies are being phased out in the next few years and that there is pressure from the EU
for change will not have a direct impact on housing for Gibraltarians but Mr Levy believes that artificially high prices on the local market combined with the much awaited Government backed ‘affordable’ housing plans will now cause a drop in prices currently being asked by the agencies. Even building societies which lend mortgages have been participating in the sale of properties at what has been an unprecedented rise in sale values.

The luxury market such as Queensway Quay, Ocean Village and the new Marina Bay complex are, says Mr Levy, likely to see less demand as outside investors wait to see the direction the finance centre takes.

However Mr Levy said that the Eastside development will be a major positive factor for Gibraltar if it goes ahead as planned.

This will change the character of Gibraltar and we will become a proper holiday centre. This will bring new people to Gibraltar and will compensate for any loss in the finance centre. It will put us on the map.

Mr Levy meanwhile predicts that as soon as the Government backed Sands project houses go on sale on 50/50 or 70/30 options the rest of the local housing market will drop its prices.

"Prices today are just not realistic. They cannot be justified,” says Mr Levy, recognising that demand and prices in Gibraltar has even led to inflation of prices in the immediate vicinity across the border especially La Linea.

And Mr Levy insists that the way ahead for Gibraltar is to keep building more houses for Gibraltarians so that they can afford to live in Gibraltar rather than opting to live away. He suggests that when MoD releases more land this should have special concessions for developers who purchase to build for the local housing market.

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