According to the real-estate sector in the Balearics, Spain's new housing law, which was passed some three months ago, has resulted in a reduction in the supply of properties to rent.
The president of the API association of estate agencies in the Balearics, José Miguel Artieda, says that there has been a reduction across Spain. In the Balearics, he estimates that there has been a ten per cent fall. In Catalonia, it is reckoned to be as much as 20%. Owners are preferring to leave their properties unoccupied rather than give tenants the legal guarantees created by the new law.
Artieda explains that the law establishes that automatic renewal of rental contracts plus a one-year extension can mean a minimum of six years; this is seven years if the owner is classified as being a large property owner.
It may be that owners decide to sell rather than rent out, but Artieda suggests that the law may lead to there being ever more empty properties. The National Statistics Institute's latest housing census gives a figure of 105,000 empty properties in the Balearics. As the total number of dwellings in the Balearics is just over 650,000, almost one-sixth of all properties are empty.
The new Partido Popular government in the Balearics has announced that it will lodge an appeal against the housing law on the grounds of unconstitutionality.
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Charles Dalrymple-ChumleyWell I read the political tales in the MDB. And wonder if anyone one of them understand human nature. This was always bound to happen. Money is mobile. Assets can be frozen or liquidated. Unfortunately the left don’t realise that. They praise the European Union ideals. But would like to practice a closed socialist market. You can’t have both.
When a law gives more rights to squatters than to the landlords then you know something’s seriously wrong. No one would touch it with a barge pole other than those already trapped into a contract or they’re so rich they don’t care. But the majority of smaller landlords are locking up and waiting for the moratorium on ETVs to be lifted, as promised by the PP. There’ll be a flood of applications then more cries of saturation, and no housing for the locals….and around and around we go! Sigh.
Actually David Holland, I believe the law has intended consequences. Socialists don't believe in private ownership (property, businesses, transport, etc) and they would have known on implementing the law that it would (legally) benefit the hoi polloi not the owners. They saw this coming and they approved of it. What they didn't realise was that owners have choices, one of which is to lock and leave and not to rent. That has caught them out.
When the law is on the side of the tenant and squatters have legal rights, renting-out property is a highly risky business in Spain. The idiocy of the law is that it protects the offenders should they decide to break a contract or take illegal possession. So the Government has only itself to blame for a rentals shortage.
Bad Law and unintended consequences.