Only one in three foreigners who bought a home in the Balearics in 2023 were residents in the region, a new report by the Economic and Social Council (CES) of the Balearic Islands has revealed. This means the vast majority of these properties were purchased as a second home.
The report also concluded that the archipelago has the highest rate in Spain of transactions carried out by non-residents at 25 percent, the Majorca Daily Bulletin reported.
The section of the CES report dedicated to housing is based on data extracted from the National Statistics Institute (INE) which certifies a progressive increase in the rate of non-resident buyers, a rate which stood at 8.7 percent in 2007.
The same data indicates that 13 percent of purchases are made by foreign residents on the islands, which include Majorca, raising the total rate of operations carried out by foreign buyers – resident or not – to 38 percent.
This figure is six points higher than the statistics of the Association of Registrars for that year. The national average is 19.3 percent.
The debate on the purchase of homes by foreigners reared its head again last week, on the occasion of the sales of homes to foreign nationals related to leaders of Més, a left-leaning party that has always defended the restriction of sales to non-residents as a way to alleviate the ever-increasing housing crisis on the islands.
In these cases – which affected Jaume Alzamora and Lluís Apesteguia, parliamentary spokesman and party coordinator, respectively – the politicians settled the controversy on the basis of the express distinction between foreigners and non-residents.
“The condition of residence is a key element in the debate,” Apesteguia highlighted.
“We have always talked about residents or non-residents. The European Union has already told us that these limitations on non-residents can only be temporary and subject to an objective,” he said, adding that “there is a possibility” to set this prescription, “and we do not go into whether they are foreigners~”.
Alzamora pointed out that “Més speaks of non-residents, and would never discriminate against anyone on the basis of their nationality. A non-resident can be born in Ariany and we ask that their ability to buy a home be limited. Just as if you were born in Germany, the United States, or Cameroon, you have every right to buy a house if you live here.”
The data in the CES report certifies the puncturing of the real estate sector by non-residents – who may also come from another autonomous community – that are increasingly interested in buying a holiday home in the Balearics.
The study also indicates a 4.1 percent increase in prices compared to the previous year with 9.3 percent for new-build housing and 3.4 percent for second-hand housing specifically. The price index was at its highest point since 2008.
“This means that if in 2015 a person had to pay 100,000 euros [£83,250], in 2023 they had to pay up to 163,400 [£136,000]”, the report pointed out.
The report confirms the progressive increase in the price of housing that has been experienced in the last decade. It was reported in July that increasing numbers of low-paid service workers, crucial to the tourism industry, have been forced to live in caravans and makeshift homes as a result of a rising cost of living and increased property prices.
Antonio Alcover, one of the authors of the report and Professor of Economics at the University of the Balearic Islands (UIB), pointed out the existence of “two differentiated markets” – that of luxury housing and the rest of the supply – in the Balearic real estate sector “distorts the averages” that can be extracted in the different studies of the sector that are carried out.
Therefore, Alcover is in favour of “going deeper and looking at the housing market in a different way because we have two markets with two different products”. Making this distinction in the studies, he says, “is something that many members of the ESC, such as the trade unions, have been asking us to do”.
