Balearic housing quotas to help first time buyers

Steps are going to be taken in the Balearics to make first homes more affordable. Balearic Minister for Public Works, Housing and Transport, Francesc Quetglas, said yesterday that the near 850'000 residents in the Balearics occupy 59.7 per cent of the Balearic housing sector, the remaining 41 to 43 per cent of properties are either abandoned or are second-homes. Francesc Quetglas said that for most young couples or families, getting started on the property ladder in the Balearics, where property prices are the highest in Spain - is extremely difficult, adding that his department and the local government intend to take steps to slow down the growth in the tourist property market and introduce policy which will make it easier for residents to buy a first home. Francesc Quetglas added that he expects Balearic government help in putting the brakes on further urban developments as the islands are “running out of land and resources.” Yesterday the Minister presented a conclusion to an exhaustive report on housing in the Balearics. During the period 1991 to 2000, the Balearic population grew by 110'000 while during the same period, 87.059 new houses were built, at the end of the year 2000, there were 502.460 houses in the Balearics. Francesc Quetglas said that while the spending power of the wealth of the foreign population is evident, the economic position of the majority of the immigrant population is low to middle class, a stark contrast to the high price of housing in the region. The report states that during the nineties, the property continued to expand at the dynamic rate of the previous decades, but at the cost of the available land. However, at the end of 2000, based on vacant land, the Balearics' housing capacity was 721.000, over 200'000 more that the market size. But in order to make sure that, should the Balearic housing quota reach its peak, new houses are not built for the top of the market and even steps are taken to either prohibit or penalise owners for having either empty or abandoned properties. Other measures, Francesc Quetglas said, which are to be considered include introducing incentives for people to renovate abandoned properties and rent out second homes. Government-aided renovations could be the answer for the first-time buyer. Of the 90.404 building licences granted between 1991 and 2000, less than ten per cent were for renovations. Another problem is that only 12 per cent of the property sector are council houses, so the only solution is to introduce ways of capping Balearic house prices, which between 1987 and 2000 rose more than anywhere else in Spain. During that period, the average price of housing in the Balearics rose by 233.3 per cent. Quetglas said yesterday “houses have been built at a rate way above the needs of the resident population and the irony is that the market has not satisfied the community's needs.”