The price-containing housing minister

Increased supply of homes will contain prices, or so the minister hopes

Andrew EdePalma30/08/2024 11:28

José Luis Mateo may well be the only Balearic government minister who hasn’t spent the past month on holiday. “Personal reasons” having led to the departure of Marta Vidal, Mateo has had to get himself up to speed on housing and transport. He will surely deserve a long holiday if he manages to crack either of them.

Rounds of meetings there have been. The platform for people affected by mortgages and the real-estate agents’ professional college have been among the interlocutors. Mateo announced to them both the other day that he intends easing tensions in the property market and containing prices. How? By increasing the supply of homes.

He said this not long after giving an interview in which he stated: “We must be very careful with any limitation of the free market and competition.” In this regard, as an example, he alluded to the Spanish government legislation that permits rent caps. The Balearic government has rejected implementation of this, and it may have good cause to have done so; rent caps can be counterproductive.

The minister is essentially betting on the free market to get the Balearics out of a housing emergency. Where does the supply come from? 7,000 or so homes for sale or rent from the various schemes the government has thus far presented, e.g. conversion of commercial premises. By and large, these schemes aren’t costing the taxpayer, but Mateo says there has to be public construction as well. Maybe there needs to be a hurry-on then, but not until the next budget (2025) at the least, always bearing in mind that the minister has a new housing law to present and conceivably have approved by the end of 2025.

Will he meet his aims for increased supply and price containment? Let’s wish him luck, because God knows he needs it.