Only one in three foreigners who bought a home in the Balearics in 2023 were residents in the region, which means that the vast majority of these properties were purchased as a second home. The Report of the Economic and Social Council (CES) of the Balearic Islands concludes that the community has the highest rate in Spain of transactions carried out by non-residents: 25 %.
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% in 2007. The same data indicate that 13% of purchases are made by foreigners resident in the islands, which raises the total rate of operations carried out by foreign buyers, whether resident or not, to 38% (six points higher than the statistics of the Association of Registrars for that year). The national average is 19.3%.
The debate on the purchase of homes by foreigners came to the fore again last week, on the occasion of the sales of homes to foreign nationals related to leaders of Més, a party that has always defended the restriction of sales to non-residents as a way to alleviate the galloping crisis of access to housing in 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 pointed out.
“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”.
For his part, 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”.
In any case, the data in the CES report certify the penetration of the real estate sector by non-residents (who may also come from another autonomous community), who are increasingly interested in buying a holiday home in the islands. This has been a key factor - but not the only one - in rising property prices. The CES study indicates a 4.1 % increase in prices compared to the previous year (9.3 % for new-build housing and 3.4 % for second-hand housing). The price index was at its highest point since 2008. “This means that if in 2015 a person had to pay 100,000 euros, in 2023 they had to pay up to 163,400”, the report points out.
The report confirms the progressive increase in the price of housing that has been experienced in the last decade and the Professor of Economics at the University of the Balearic Islands (UIB), Antonio Alcover (one of the authors of the Report), points out that the existence of “two differentiated markets” - that of luxury housing, on the one hand, and the rest of the supply, on the other - in the Balearic real estate sector “distorts the averages” that can be extracted in the different studies of the sector that are carried out. For this reason, 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”.