Representatives of the real estate market of the Balearic Islands strongly opposed the proposals of local authorities aimed at reducing the environmental burden and the problem of overpopulation in the Balearic Islands.
One of such decisions was the consent of the Parliament of the autonomous community to grant the right of the government to the region to impose restrictions on the purchase of residential real estate for foreigners. We are talking primarily about those who have been living in the archipelago for less than 5 years. The decision to restrict the sale of vehicles for foreigners was also supported.
According to the Balkarian International Real Estate Association ABINI, this decision is not sound, as it will cause more confusion for the market and the local economy than it will be able to solve the problems associated with them. At the same time, in its statement, the organization claims that the parliament approved the government's proposal, which has neither real legal force nor any real consequences. At the same time, it violates many pan-European norms.
At the same time, Josep Melia, a representative of the parliament of the region, expressed in an interview with the Balearic publication Ultima Hora the position that the current European rules and regulations on this issue should be changed. However, other critics of these decisions point out that if the authorities decide to sell new regulations, it will negatively affect the social and economic spheres of the Balearic Islands.
More than 25% of the archipelago's GDP is associated with the real estate sector, which in turn operates largely thanks to foreign tourists, expats and investors. Such restrictions on foreign ownership will lead to a sharp increase in unemployment, a further decrease in household income and tax collections.
ABINI also reminds of the dangers of reforms in urban planning and in the real estate market without foresight and long-term development plans. The current decision is momentary and therefore dangerous. At the same time, there is not enough investment on the part of the authorities themselves in the sector, in the residential segment and infrastructure. Systematic development assistance from the authorities would easily solve a lot of problems that the region has encountered today. Including with «overpopulation» or lack of housing.
On the other hand, there is information from the territorial planning manual of the Balearic Islands from 1999, which predicted a population growth of 10% over 10 years. However, in 20 years it has grown by 50% — to 1,223,000 inhabitants. Today, government forecasts of population growth also do not keep up with real indicators, for example, provided by INE. Whatever one may say, but the influx of population to the archipelago is extremely high and even with the help of the government, the market cannot absorb it completely.
Market representatives also criticize the authorities for the liquidation of land that would otherwise be suitable for the construction of permanent housing. In 2022 alone, with the stroke of a pen, a total of 7,000,000 square meters of land suitable for residential construction was liquidated and would have allowed the creation of more than 15,000 houses. Another factor in maintaining the shortage of the archipelago's housing stock.
ABINI comments: «Our urban planning and urban planning system has become so entangled in its own laws and regulations in recent years that civil servants and architects have already despaired of trying to adequately interpret the rules in the sector. This, and much more, continues to move residential property prices up, which is actively reflected in statistics — the Balearic Islands have become the region of the country with the most active price growth over the past 2 years».