Natalia Bueno of the API association of real estate agents in the Balearics says that rents are continuing to rise because there is less and less supply, while demand isn't ceasing. Because of this, she says that people are having to move to the mainland in order to find somewhere to live.
She blames the Spanish government's housing law, which was passed in May, for having created additional stress in the rentals market; it is having the precise opposite effect to that which had been intended. In the Balearics, the number of properties has been reduced by between 20% and 30%.
"Owners prefer to sell or to stop renting or to give properties to their children, who can't find homes either. More and more clients are telling us that they want to stop renting their apartments because in a few years their children will need them."
Another dynamic that Bueno points to is that renting out is to the highest bidder. Association members report an increasing number of cases of people offering owners more money than they are asking to rent a property. "Tenants are making bids of their own. They tell agencies to advise owners that they are willing to pay 100 euros or more in exchange for keeping apartments."
As to prices, she believes that Mallorca is on its way to becoming like Ibiza. "For less than 1,200 euros it's impossible to find something with two or more bedrooms."
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I bought more property in France rather than Spain because of the risk of letting in Spain. There is legal unceratinty to a ridiculous degree. Even if one wins a civil trial, there is no way to inforce it. That's why people here like to see smirkingly say "just sue me" if there is an issue.
I have a property that due to personal reasons I want to rent for 2 years only. I can't do that due to the new law, so rather than run the risk of not getting my property back when I need it, I have chosen not to rent it. I doubt I'm the only one.
Agree with Charles completely I personally know of many instances where there were people serious people with the financial where with all to make the purchase however due to the situation in Mallorca with regard to renter right´s and people breaking in and not being able to get them out or people not paying the rent and not getting them out for a couple of years !
Natalia Bueno of the API association of real estate agents says that the Spanish government's housing law is having the precise opposite effect to that which had been intended. Quelle surprise! What in God's name was its original intention? Anyone with half a brain sitting around the cabinet table could have seen the real consequences of the planned housing law reform. Give all the rights in law to tenants and of course landlords are going to retreat and retrench from the market. It's not rocket science. This is why socialist governments should never get involved in laws and regulations for commercial markets since they don't have the first clue of how they work or what they need to thrive. Now the law has to be repelled and maybe just maybe some landlords will re-enter the market. But it's a long shot as many will be nervous that another change of mind could hand their tenants all the rights again. Many landlords just won't take the risk. The damage has been done and it will take a very long time to turn this tanker around.