The significant increase in housing prices observed in most developed countries since the outbreak of the pandemic has prompted some Governments to attempt to lower housing prices.
Among the ways there is also a restriction on the acquisition of real estate by foreigners, especially non-residents. New Zealand has been doing this since 2018, but without much result. Now Canada has joined it. In Spain, the Government of the Balearic Islands started talking about the introduction of such a measure. The executive power of the islands decided to create a commission to study the possibility of a ban on the purchase of housing by citizens who have lived on their territory for less than five years (this applies to both foreigners and Spanish citizens).
According to Idealista, the price per square meter of residential real estate in the Balearic Islands at the end of 2022 was 3,706 euros, which is 10.5% more than for the same period in 2021. The cost of real estate here is ahead of the average prices of Madrid (3122 euros/m2) and Catalonia (2333 euros/m2). Living in the Balearic Islands is attractive to many people, especially those with high purchasing power. Housing as a second place of residence among European citizens, as well as from other countries of the world, is one of the most popular.
The data of the College of Real Estate Registrars for the third quarter of 2022 confirm a good year in terms of the total number of housing transactions in the Balearic Islands: more than 13,600 transactions were registered in the first nine months of the year. As for foreigners, they have purchased more than 4,600 houses during this period.
Experts say that the intention of the Balearic government, in principle, has little legal basis, since the European Union stands for the free movement of people and capital across the 27 member countries and for non-discrimination on the basis of citizenship. At the same time, Denmark and Malta are not afraid to require residence in the country for at least a year in order to be able to purchase housing, regardless of whether you are a resident or not. Even stricter restrictions were in Austria, where before joining the EU, the sale of houses to foreigners was prohibited. Now EU citizens can do this, but non-EU citizens must apply for special permits.
President of the Balearic Islands Francine Armengol suggests that the Spanish government apply such a measure only on the territory of the Balearic Archipelago, stressing that it may not be suitable for other regions.
