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Real estate sector calling for "corrective measures". | Efe

Andrew EdePalma04/02/2023 08:12
TW
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At a real estate conference in Palma on Friday, the president of the college of real estate agents, Natalia Bueno, said that the rental market in Mallorca is in a similar situation to that for buying and selling. "There's a lot of demand and little supply." Consequently, the cost to rent continues to increase. If tenants once looked for properties for between 700 and 800 euros, they are now increasingly less likely to find them. In Palma, a two to three-bedroom property is rarely available for under 1,000 euros. In other parts of the island, prices can be similar; it depends on the property.

Bueno observed that it is like a spiral that is constantly feeding itself. "Every time there is an available property, the owner takes the opportunity to raise the price by 10 or 15%."

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The real estate sector has been calling for tax incentives for empty properties "It is essential that all municipalities make an inventory of all empty properties and create a dynamic so that they can go on the rental market." Bueno also highlighted the need for municipal regulations to enable so-called co-living buildings to accommodate temporary workers during the tourism season.

As to sales of properties, it was pointed out that data for the third quarter of 2022 from the Registrars Association indicated slight decreases in the number of sales and in the average price as well as in purchases by foreigners. "We are seeing that demand from foreigners to buy a second home is falling," said Bueno, adding that a significant number of Balearic residents are still waiting for the 20% mortgage guarantee announced by the Balearic government to be able to buy their first home.

José Miguel Artieda, who is succeeding Bueno as president of the College, commented on the debate regarding purchases by foreigners. "It is true that they have higher purchasing power and that this makes housing more expensive and displaces the local population." He argued that corrective measures for the market need to be adopted, "but without thereby displacing foreign buyers", as they constitute a very important element of real estate activity.