"If you a buy a home on Mallorca, it should be to live here..." This is the view of the Mallorcan Nationalist Party, Mes, who are junior partners in the coalition Balearic government.
This week the Balearic parliament approved a motion which aims to curb the sale of homes to non-residents in an effort to resolve the housing crisis. A big percentage of home sales are to foreign buyers in most cases, non-residents.
Mes have taken their drive to the European Union. "The Balearics is rapidly reaching the point of no return when it comes to housing. For this reason we appeal to the European Commission to limit the sale of properties on the islands to non-residents..."
The announcement has sent shockwaves through the real estate sector which is heavily reliant on the sale of properties on the islands to non-residents. They have said that the shortage of affordable housing is a direct result of failed government policies.
The announcement comes at a time when the real estate market is struggling with higher interest rates and a drop in demand for properties as result of the economic European slowdown and the war in Ukraine.
The following statement was issued by the National and Foreign Association Real Estate Agents (ABINI) this week:
"The Balearic Parliament approves a motion with no legal validity, nor real effects on the limitation of property sales to foreigners. This limitation violates superior national and European legislation, and will generate more confusion than solutions.
"The reality is that the lack of foresight in urban planning and errors in calculating population growth have been strangling access to housing for the Balearic population for decades. The lack of investment in infrastructures also generates a feeling of saturation that could have been avoided.
"The 1999 Spatial Planning Guidelines of the Balearic Islands established growth limits of 10% over 10 years. In the 20-year period 2000-2020, the population of the Balearic Islands has grown by 50% (823,000 to 1,223,000 inhabitants). Now, once again, growth criteria are being established that are much lower than what the INE indicates for the Balearic Islands, which means that General Plans as important as that of the capital of the Balearic Islands are working on population models that are unlikely to be fulfilled. Nor is the option of vertical growth being given, which the sector has been demanding for years in order to generate affordable housing.
"In addition, an enormous amount of programmed land for development has been eliminated in order to generate housing, the vast majority of which is destined for primary residences. In this year alone, a total of 7,000,000 m2 of land to alleviate the housing shortage of more than 15,000 homes in the Balearics has been eliminated with the stroke of a pen. These plots of land were not for luxury residential, they would have provided a lifeline to the people who live and work in the Balearic Islands. It will take decades to recover these growth spaces.
"Now we have to add the enormous increase in building costs, we are 50% more expensive than on the mainland and we also have the chronic slowness and inefficiency in the processing of building permits. Our urban planning system is so muddled after years and years of politicisation of housing that civil servants and architects are desperate to interpret urban planning regulations. These three factors add even more weight to the increase in the price of housing in the Balearics. We are the community where the price has risen the most in the last two years and this will not change with the motion that the Government has brought forward.
"Are all the ills we suffer in the Balearic Islands caused by foreigners buying property? At ABINI we know this client perfectly well, their search profile, as well as the love and respect they have for our islands, their culture and their people. We can guarantee that the foreign buyer will very rarely compete with a Balearic buyer for the same property. This has not been the case historically and probably never will be in the future. What we do consider worthy of debate is the limitation that is to be imposed on the owner of a property, who will see his rights limited when it comes to being able to offer it freely on the market.
"It is true that in Denmark there is a restriction on foreigners buying a home, but Spain did not request this exclusion in its treaty of annexation to the European Union and therefore it cannot be unilaterally introduced from the Balearic Islands without further ado. Furthermore, the economic and social context of the regions, their industries, jobs and business fabric must be assessed. More than 25% of the GDP in the Balearic Islands is related to the real estate sector, so these measures would lead to a sharp increase in unemployment and a huge drop in revenue from the tax that collects the most, the Real Estate Transfer Tax. Have the promoters of this motion, which has no practical effects, assessed the economic impact it would have?
"Finally, we would like to stress that the motion seeks to contain population growth in the Balearic Islands by intervening in the free housing market, tourist places (which have already been limited), limiting the number of vehicles and also tried to limit immigration, something that the government partners rejected. With an election year in the offing, proposals are set to skyrocket and the real estate sector is calling for prudence and serious teamwork to solve real problems, without generating new difficulties. Agitation, prejudice and proposals contrary to national and European laws are not going to have a positive effect for anyone. Furthermore, this proposal will not create one more affordable home in the Balearics, which is what the people who live here really need."
7 comments
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In the UK properties are more often seen as commodities to be traded for profit. Why should Mallorcans think any different? The housing shortage in the UK drives prices up. Same here. A ten year old can understand supply and demand economics. It’s not rocket science ! Seems the politicians are short of a few brain cells. As ever.
Stan The ManIt's not the same as in Devon and Cornwall. A. Local and more so young people moved away as no good jobs in the area. B. The locals happily sold to the highest bidder rather tha to another local. Here it's the government who totally failed to build affordable housing. In Devon and Cornwall , as in all of UK, not much land to build on. And people in Corwall love the tourist money but not the tourists.
Stan The ManMost of the local people will not be able to afford what the foreigners buy. It's the local government who has failed to build affordable homes, and now take a cheap shot to foreigners. The usual look elsewhere when you done mistakes at home. They better get their act together rather than blame other than themselves
Andy WalkerThe Balearic govt does not no what it wants. It does not want what it’s got true. But what’s the alternative, that’s going to provide money for nothing. It’s not Nice and can’t be Monaco . It could be neither and better than both those. But would need vision and of course be open to the world’s brightest and wealthiest. Taxation and accommodation of high income none European Union residents would need to be radically changed. Politically I can’t see that happening. The vested interest wouldn’t let it.
If these idiots and the environmentalists get their way, the people of Mallorca will soon be riding donkeys again sooner than they think!
I’m sure plenty of foreign home owners would love to use their own homes much more, but for non EU citizens, there are already restrictions on buying them (if in a rural area), foreigners are not free to live in their homes without expensive visas or highly restrictive visa waivers that limit days across 26 countries, and you’re not free to rent them out as you wish either. Taxes on disposal are higher too. The homes foreigners buy are not always located where local people want to buy, anyway. So limiting inward investment from foreigners, perhaps won’t do much at all to solve the problem of affordable housing, and could even harm the economy in other ways.
In Devon and Cornwall the same problem has caused a major housing loss. The very rich have bought their properties for Holiday use only. Causing a main housing shortage for the local people. A similar problem is developing in Mallorca and there will eventually be a shortage of properties.