The Balearic minister for tourism, Iago Negueruela, called for a "deep debate" on how the sale of homes to non-residents could be curbed and slammed the opposition Partido Popular for their "Thatcherite policies."
Sebastain Sagreras, Balearic Member of Parliament for the Partido Popular said "you shouldn´t play with our livelihood." He also said that the housing favoured by non-residents was usually in the one million euros price bracket and therefore it couldn´t be classes as cheap housing. The Balearic parliament approved a motion last month aimed at stopping home sale to non residents in an effort to address the housing crisis which exists on the island.
"The Balearics can´t be a theme park where there is no room for people who live here," said Negueruela. But the coalition government has been slammed by real estate agents who have believe that the housing crisis has been cuased by failed government policies.
Previous Balearic governments have welcomed the arrival of foreign property owners.
The Association of Foreign and National Real estate agents ABINI is not impressed and this morning they issued the following statement:
"The Balearic Parliament approves a motion with no legal validity, nor real effects on the limitation of property sales to foreigners. This limitation violates superior national and European legislation, and will generate more confusion than solutions.
"The reality is that the lack of foresight in urban planning and errors in calculating population growth have been strangling access to housing for the Balearic population for decades. The lack of investment in infrastructures also generates a feeling of saturation that could have been avoided.
"The 1999 Spatial Planning Guidelines of the Balearic Islands established growth limits of 10% over 10 years. In the 20-year period 2000-2020, the population of the Balearic Islands has grown by 50% (823,000 to 1,223,000 inhabitants). Now, once again, growth criteria are being established that are much lower than what the INE indicates for the Balearic Islands, which means that General Plans as important as that of the capital of the Balearic Islands are working on population models that are unlikely to be fulfilled. Nor is the option of vertical growth being given, which the sector has been demanding for years in order to generate affordable housing.
"In addition, an enormous amount of programmed land for development has been eliminated in order to generate housing, the vast majority of which is destined for primary residences. In this year alone, a total of 7,000,000 m2 of land to alleviate the housing shortage of more than 15,000 homes in the Balearics has been eliminated with the stroke of a pen. These plots of land were not for luxury residential, they would have provided a lifeline to the people who live and work in the Balearic Islands. It will take decades to recover these growth spaces.
"Now we have to add the enormous increase in building costs, we are 50% more expensive than on the mainland and we also have the chronic slowness and inefficiency in the processing of building permits. Our urban planning system is so muddled after years and years of politicisation of housing that civil servants and architects are desperate to interpret urban planning regulations. These three factors add even more weight to the increase in the price of housing in the Balearics. We are the community where the price has risen the most in the last two years and this will not change with the motion that the Government has brought forward.
"Are all the ills we suffer in the Balearic Islands caused by foreigners buying property? At ABINI we know this client perfectly well, their search profile, as well as the love and respect they have for our islands, their culture and their people. We can guarantee that the foreign buyer will very rarely compete with a Balearic buyer for the same property. This has not been the case historically and probably never will be in the future. What we do consider worthy of debate is the limitation that is to be imposed on the owner of a property, who will see his rights limited when it comes to being able to offer it freely on the market.
"It is true that in Denmark there is a restriction on foreigners buying a home, but Spain did not request this exclusion in its treaty of annexation to the European Union and therefore it cannot be unilaterally introduced from the Balearic Islands without further ado. Furthermore, the economic and social context of the regions, their industries, jobs and business fabric must be assessed. More than 25% of the GDP in the Balearic Islands is related to the real estate sector, so these measures would lead to a sharp increase in unemployment and a huge drop in revenue from the tax that collects the most, the Real Estate Transfer Tax. Have the promoters of this motion, which has no practical effects, assessed the economic impact it would have?
"Finally, we would like to stress that the motion seeks to contain population growth in the Balearic Islands by intervening in the free housing market, tourist places (which have already been limited), limiting the number of vehicles and also tried to limit immigration, something that the government partners rejected. With an election year in the offing, proposals are set to skyrocket and the real estate sector is calling for prudence and serious teamwork to solve real problems, without generating new difficulties. Agitation, prejudice and proposals contrary to national and European laws are not going to have a positive effect for anyone. Furthermore, this proposal will not create one more affordable home in the Balearics, which is what the people who live here really need."