Sergio Nasarre is professor of civil law at the Rovira i Virgili University in Tarragona and the UNESCO chair of housing at the university. In Palma for a conference - 'The Future of Housing: New Solutions in the Balearic Islands', organised by the regional housing ministry - he spoke among other things about possible restrictions on foreign buying of homes.
"Malta did well in negotiating its entry into the European Union, and Spain could renegotiate its terms. The European Union is starting to talk about the problems of insularity, but the Germans and Dutch might vote against it. They don't want to die in Germany; they want to die in Spain, specifically in Mallorca."
He refers to public housing policy in Germany and how this impacts the Balearics: "Their rental policies affect the Balearics because they buy here. There's a very large market there - 55 per cent of Germans rent - and they're required to put down 40 per cent of the total value to buy. So they save thanks to affordable rent there and then buy an apartment here. What do we do with expatriates? Is the world for everyone or not? We could be accused of racism."
On holiday rentals, Nasarre observes that internationally their impact on prices is extremely low. Analyses in Barcelona indicate that a one per cent increase in tourist use increases rents by only 0.0098 per cent. But they do affect supply: "A quarter of the homes in the municipality of Pollença are dedicated to tourist rentals. And if there's no housing supply, prices rise.
"If you give homeowners a choice between traditional or tourist rentals, they'll choose the latter. We need to find a balance between landlords and tenants. But if you create more legal uncertainty, more controls, homeowners will flee the residential market and turn to tourist rentals, short-term rentals or room rentals. Even to the black market. It's human nature."
As to control of rents, Nasarre highlights cases such as A Coruña and Santiago de Compostela, which have adopted this measure but have significant concerns. "Barcelona was declared a 'stressed zone' in 2024 and the results have been disastrous. This always happens when a market is intervened in, whether it's the bread market or the housing market. In Brussels, for example, the housing stock has deteriorated, and buildings are not being repaired. In Barcelona, the market is frozen and the reduction in supply is enormous."
Housing policies adopted before the financial crisis, Nasarre believes, have contributed to current problems. "It wasn't by chance. Before the financial crisis, during the real estate boom, it was possible to save up for a down payment and buy a small second-hand home. Since 2007, obtaining a mortgage has been difficult, and there were numerous evictions between 2009 and 2011. European directives make it harder for families to access credit; in other words, they effectively prohibit the poor, middle, and lower classes from buying property. Others have bought, many of them being foreign funds or wealthy individuals purchasing their fifth home.
"Families have been left out of the game. There's collateral damage: it encourages, or rather forces families into renting. This began in 2007 but especially after 2016. There's an extreme rental market crisis. In Spain, from 2009 to 2012, renting was always more expensive than buying. Now they can't afford either. There's aid for cooperatives, but there are only 22 in Spain."
In his opinion, Spain's housing law and tenancy act both need repealing, so that homeowners can put their properties on the market, just one issue being protection given to squatters.