Price of Mallorca homes 55% higher than five years ago

The ABINI association of national and international real estate companies in the Balearics says that it will be "impossible" to absorb this increase in prices without there being significant consequences for the islands' residents. The association insists that new medium-priced homes are needed, as developers have focused on the high end of the market due to the elevated cost of raw materials, land and construction.

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It warns that new house building has hit rock bottom. In the third quarter of last year, 379 building approvals were given. "We need 1,750 per quarter; 7,000 per year." In addition, ABINI believes that it is imperative to have a reliable registry of empty homes; a figure of 100,000 from the National Statistics Institute has been questioned.

The association stresses that the Balearic government's new 'limited-price housing' initiative under the housing emergency decree must be reserved for first homes for Balearic residents and that it is acted upon as soon as possible. It is "difficult to understand" that initiatives such as this are being blocked; a number of town halls have said that they will not apply it. "The problem is very serious and it is unacceptable that action is not being taken quickly and efficiently."

For ABINI, Balearic government tax measures - reduction of the property sales tax and elimination of the wealth tax - are positive. "The high taxation in the Balearics has made the region less competitive compared to other regions of Spain and to other countries with less aggressive fiscal rules."