Modern practices and elevated buyer demands driving up construction costs – CEO Denise Xuereb

AX Real Estate CEO Denise Xuereb has emphasised that modern building practices as well as more stringent buyer demands have helped to continue increasing construction costs, leading to further inflation in the property market.

Her comments came as she was speaking in a panel discussion featuring other construction industry leaders during the Malta Property Show, which is being held at the Malta Fairs and Conventions Centre (MFCC).

In her intervention, Ms Xuereb, who is also Director of Construction and Development at AX Group, provided insights into the complexities behind rising construction costs.

The construction industry has faced increasing costs for a number of years. This has been primarily driven by rises in construction material costs brought by the war in Ukraine and the lasting impact of COVID-19 on importation.

However, Ms Xuereb noted that aside from material costs, there are also several other factors at play.

She remarked that workforce, administrative, and unnecessary bureaucratic costs “are a reality” when it comes to rising costs.

The sector has been hindered by a shortage of skilled workers for quite some time, with industry leaders stating that they have had to heavily rely on immigrants in order to keep the construction industry functioning.

This is particularly crucial when considering that the construction sector is one of the most important - and also most controversial - sectors in Malta's economy.

The CEO also pointed out that modern building practices, when combined with elevated buyer demands, lead to higher quality and standards, which in turn drive up costs.

Ms Xuereb stated that this increase in costs will also lead to the construction sector to having higher quality standards as well as better value.

“Plus, the specialised skills and expertise of architects and consultants further add to the overall expenses,” she continued.

Ms Xuereb has been a Director of AX Construction since 2010 and an Executive Director on the board of AX Group for the past decade. She is also Vice President of the Malta Development Association, the association that brings together real estate developers, estate agents, and other interested parties.