ARCHIVED - Balearic Islands pushes ahead with plans to ban non-resident foreigners from buying property
The Balearics are now the most expensive place in Spain to buy a home
At the end of last year, the government in the Balearic Islands started investigating ways to restrict house purchases by non-residents, since rapidly escalating prices are pushing locals out of the market. Now, bolstered by similar sales laws passed in Canada on January 1, a commission is studying the possibility of prohibiting both foreigners and citizens who have been living in the community for less than five years from buying.
In the Balearic Islands, the price of property per square metre has risen to 3,706 euros, making the archipelago the most expensive place in Spain, even above the capital of Madrid, which stands at 3,112 euros/m2.
Within the EU, restrictions such as this one are difficult to get approved since they impact on the freedom of travel, but Canada has placed a two-year ban on selling homes to non-resident foreigners after housing prices skyrocketed by 44% in less than two years.
Some countries like Denmark and Malta have managed to skirt the EU rules and do require a minimum residence time before buying a house and further afield, Australia and New Zealand also have restrictions.
Many experts put the rise in property demand down to a recent population boom, but with the number of Balearic Island residents expected to grow by 25% in the next 15 years, the housing shortage is only going to get worse. The Balearic National and International Real Estate Association (ABINI) estimates that this region needs 16,000 more additional homes.
During 2022, the average price per m2 in Spain reached its highest figure ever, and foreign demand far exceeded the national one. What’s more, in the first half of the year, foreign buyers accounted for 20.3% of all property transactions, another record, while overseas investors snapped up more than 50% of all real estate in the Canary Islands.
Also of interest: What will the Spanish property market look like in 2023?
Image: Freepik
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