Government officials in the Balearic Islands have announced that they want to ban non-residents from buying property on the islands.
As property prices soar in Mallorca, Menorca, Ibiza, and Formentera, pushing locals out of the housing market and creating “ghost villages,” the officials are demanding a similar policy to that in Canada where a two-year ban was introduced meaning ‘outsiders’ are unable to buy property. This ruling was made after house prices shot up by 44 percent in less than two years.
Homes in Formentera and Mallorca have been reported as the most expensive properties in Spain, due to their huge demand. Prices on both islands continued to remain high during both the 2008 financial crisis and the COVID pandemic.
The government statistics show that the number of foreigners purchasing properties in the Balearic Islands exceeds way more than the rest of Spain. In fact, approximately 38.95 percent of total purchases in 2022, were done by buyers who were non-residents. In comparison, the national average was 12.61 percent.
Referenced by the Guardian newspaper, the Balearic Vice-President Juan Pedro Yllanes, has said “we should follow Canada’s example,” and has asked the Spanish government to “put pressure on the EU to allow the islands to impose a similar ban.”
The Vice-President also said that, although this policy would go against the EU’s principle of free movement, other examples are also available, such as the Austrian Alps. This is where the EU has acknowledged the need to protect culturally significant places or natural beauty that should be protected from “excessive outside pressure”.
Another example is the Aland Islands in Finland, where there are limits on buying second homes, and in Croatia, EU citizens must be residents for at least 10 years before they can buy agricultural land.
Denmark and Malta also managed to avoid the EU rules and now require a minimum residence time before purchasing a property.
The Balearic president, Francina Armengol, previously said “Many European and other citizens can afford property at prices that are impossible for the citizens of these islands.”
The Balearic government has also made it known that they want Madrid to introduce curbs on the prices of houses, simply by declaring the island as a “stressed area”.
Such areas can be defined as a region where the cost of rent or mortgage exceeds more than 30 percent, compared to the average local income.
This also affects the hospitality sector as restaurateurs and hoteliers say they struggle to attract staff from the mainland as rents are far too high. Bars and restaurants also suffer as there is less custom, due to the fact that local residents are driven out and homes are left empty for much of the year.
Experts believe that the rise in property demand is due to a recent population boom and with the number of residents on the islands due to rise by 25 percent in the next 15 years, the situation is only going to get worse. The Balearic National and International Real Estate Association (ABINI) estimates that an additional 16,000 homes are needed in this region.
February 03, 2023
February 01, 2023
February 01, 2023
Updated: January 31, 2023 CET
January 26, 2023