Summer has been over for several weeks. Most tourists have returned to their homes and the Tramuntana wind brings a couplet to the islands: the increasingly worrying problem of access to housing in the Balearic Islands. Menorca also shows a particularity in the real estate market that marks the course of the discussion, due to the strong growth of French buyers. Transactions by Gallic citizens with high purchasing power already represent a large percentage of sales transactions. The numbers speak for themselves.
Young people condemned to live in caravans: “I stopped renting apartments in Menorca because foreigners buy them with money”
There are no official data on the nationality of the buyers, but, for example, of the 125 real estate sales transactions carried out in Menorca by the Bonnin Sansó real estate agency between January and April 2022, 19 correspond to French clients, that is, 15, two%. In real estate transactions that exceed 600,000 euros, people with French citizenship represent 68%. According to the Institut d’Estadística de les Illes Balears (IBESTAT), between 2018 and 2021 the number of French residents in Menorca went from 507 to 654, most of whom are registered in Ciutadella.
“Some take it as an invasion, but if you go to Eivissa you will also find many Italians and if you go to Mallorca you will see Germans,” says the manager of Finques Armengol, Lluís Armengol, in dialogue with elDiario.es. Regarding the reasons for this growing demand, the businessman highlights two: “On the one hand, the financial strength of France compared to the economies of other countries historically interested in buying a home on the island, such as Spain or the United Kingdom, and, on the other, the The reason is simple: Menorca is in fashion”.
High rental and purchase prices
The French bet heavily on Menorca and it shows. Whether due to fashion or economic strength, the impact of French demand has its consequences on the real estate market. The Balearic Islands leads the rise in rental prices throughout Spain, according to data from the National Institute of Statistics. Between 2015 and 2022, the percentage increase has been 13.3%. The increase in the population with high purchasing power -in general, but with the French in the lead- in Menorca, and the growing rate of rental and purchase prices are two trends that explain each other.
For its part, the purchase prices of housing in the Balearic Islands in the second quarter of 2022 have experienced an increase of 2.9%, according to the Housing Price Index (HPI), a statistic prepared by the National Institute of Statistics that measures the evolution of the buying and selling prices of free price housing. While the average increase at the national level is 1.9%, the Balearic Islands mark an exact point above, being the territory where the purchase prices of new and second-hand homes increased the most. This growing rate places the Balearic Islands among the three autonomous communities with the greatest increases in this period, even above Castilla-La Mancha and Asturias, which experienced increases of 2.5%.
Limit purchase to foreigners
Cristina Gómez, head of Housing and Employment at the Consell de Menorca, speaks with elDiario.es about the project that plans to limit the possibility of buying holiday homes by non-residents in the Balearic Islands. “Our intention is that only people who prove two years of residence on the islands can buy a home. All limits have been exceeded. It is unacceptable that the purchase of housing is a financialization or investment good and not a use good. Nor do we agree with requesting the prohibition of purchase by foreigners, it is unjustified discrimination. What we defend is that cities are for those who inhabit them”.
Our aim is that only people who can prove two years of residence on the islands can buy a home. All limits have been exceeded
— Ministry of Housing and Employment of Menorca
Lluís Armengol, for his part, considers that rental and purchase “are two different markets” and that the rise in prices is due to the proliferation of unregulated rentals. “Instead of stopping the inflow of capital with laws against second homes, what they should do is pursue the non-qualified offer such as the one offered on AirBnB,” emphasized the businessman.
Another proposal similar to that of Podem is that of Més per Mallorca, whose spokesperson asked the European Commission to promote measures to limit the purchase of homes by non-residents in the Balearic Islands. Josep Juaneda, Minister of Més per Menorca, affirms that they are not opposed to foreigners going to live on the island: “This is an open community for all those who want to have a life project. What is not acceptable is that houses are bought that remain empty all year round and are only occupied for a few days in summer. That encourages speculation and gentrification.”
Another similar legislative proposal is the one presented by El PI, although they extend the term to agree to buy a home from two to five years for non-residents. In addition, the formation headed by Josep Melià promotes the creation of a ceiling for the number of cars and motorcycles available for rent during the high season, with the aim of reducing automobile pressure on the islands.
Despite the battery of measures proposed by the regionalist forces, all the blocs recognize that this collides with the fundamental norm of the European Union that guarantees the free movement of goods, capital and people between member countries. However, the different political spaces consulted by elDiario.es agree on the importance of advancing in specific measures, given the particular territorial circumstances of the Balearic Islands, especially Menorca, the least built and most demanded of the islands in the last period.
However, sources consulted by elDiario.es indicate the existence of specific legislation within the EU, which starts from considering the particular circumstances of each territory. An example is the limitations for the purchase of second homes in the Aland Islands, located in the Finnish fjords, whose territorial scarcity forces to guarantee by law a housing stock for residents. Another possibility is the housing model carried out in Austria, where a quarter of the available housing is owned by the national state and the municipalities and the increases cannot exceed certain limits.