Balearic Islands’ housing shortage worsens and prices continue to rise

These data were provided this week by the president of the aforementioned employers’ association, Luis Martín, and by its vice presidents Bartolomé Mayol and Óscar Carreras, during its annual conference.

The first thing they emphasize is that the serious situation of the real estate market in the islands has not improved one iota in recent years, since the population of the archipelago has continued to grow, even during the years of the pandemic. In this sense, they insist that only 2,000 homes are being put on the market each year, when 3,200 would be necessary, which is causing greater pressure on second-hand and rented residences, making them more expensive as well.

But it is clear that in order to meet the needs of the local clientele, properties should be offered for sale at a price of no more than 2,000 or 2,500 euros per square meter (between 120,000 and 150,000 euros for a 60 square meter apartment), when on the islands new construction is moving between 3,300 and 3,500 euros, or even more, which is also generating an exodus of residents and aggravating the existing deficit of road and public transport infrastructure.

A point that is emphasized is that the high percentage of properties bought by foreigners (a third of the total) is not a problem, but a symptom of what is happening on the islands, and that the high value that land has acquired, aggravated in the opinion of this business organization by the declassification of developable land, is causing an expensive product to come onto the market that only people with high purchasing power, both Spanish and from other countries, can access.

In this sense, it is emphasized that the Balearic Islands is the area of Spain where the price of real estate is increasing the most and where they are the highest, together with San Sebastian, with the compounding factor that salaries on the islands are lower, which explains why the effort that has to be made in the archipelago to access a new property is the highest in the country, and that it is necessary to dedicate 16 years of full salary compared to eight years in Madrid or Barcelona.

No land reserves

The three heads of the aforementioned business association agree on the need to protect the territory and avoid building on rural land, but warn that the declassifications have put an end to the land reserves that existed to promote affordable housing.

Thus, they emphasize that the solution is to allow the construction of taller buildings and smaller houses in some areas, to reduce the impact of land prices, and to modify the use of some plots that were initially intended for other purposes, such as sports facilities or libraries, and that in the end have not been developed. In this sense, it is indicated that for this purpose the Administration could impose conditions, such as limiting the price of part of the residences to be developed in these areas to ensure that they can be acquired by the middle classes of the Balearic Islands.

Businesses blame progressive governments for the Balearic Islands housing problem

The heads of the association of real estate promoters of the Balearic Islands (Proinba) condemn the fact that the seven years of Pact governments in the different administrations of the islands have only served to aggravate the housing problem in the archipelago, by developing policies that are mistaken or that have not served to confront the existing problems.

Firstly, they point out that the shortage of land has been exacerbated by declassification, making it increasingly more expensive, thus raising the cost of property.

Secondly, they criticize the slowness with which building permits are being processed, with deadlines exceeding one year when they should not exceed three months, discouraging investment in this area.

In addition, they regret that a debate has been opened, which the employers’ association considers absurd, on the possibility of limiting the purchase of second homes by foreigners, and they believe that a false culprit is being sought for what is happening on the islands, using arguments that are aimed at gathering votes for the elections scheduled for next year, which is why they predict that this controversy will be fuelled over the coming months. On this issue, the president of Proinba, Luis Martín, reminds us that EU legislation prohibits discrimination against citizens of member states, which means that any obstacles that are put in place will also affect islanders.

On the other hand, Martin announced this week his intention not to run for re-election next year, thus leaving the door open to other candidates who want to lead this employers’ association.

For the full article, please visit Diario de Ibiza website here.