Unsold bank homes for rent

THE Balearic government will be working together with the regional banking community to see if it's possible to rent out homes which remain unsold, Housing Minister Jaume Carbonero said yesterday.

Following a meeting on Tuesday this week in which it was confirmed that the banks are refusing to finance more than 1'200 subsidised homes, the government wants working parties to be set up as of next week to concentrate on finding solutions to the property conundrum.

Carbonero admitted after the meeting: “Selling new homes without a line of credit being offered is going to prove very difficult. “If there is some financial group prepared to do it, so much the better, if not the Balearic authorities will seek help from Central Government, probably through the Institute of Official Credit,” he said.

Carbonero explained that the small working parties which will go into action next week will be charged with “looking for intermediate solutions” to the current problems. He suggested a number of alternatives, including one which would involve the Public Rent Society assuming responsibility of the banking community's housing stock. “Before moving in that direction,” the Minister furthered, “it will be necessary to ascertain how many properties we are talking about and where they are located.” The working parties, Carbonero said, are going to look at individual cases and circumstances, but principally the problems relate to financing.
The Minister claimed that one of the biggest problems facing the housing market in Spain at the moment is the fact that 80 percent of properties are for sale and purchase and just 20 percent reserved for renting, whereas in other European countries, the ratio is reversed.

He said that the majority of banks and other financial organisations which had been present at last Tuesday's meeting didn't want to finance any more properties because they already had a stock of unsold homes. But some banks had claimed that their position wasn't “fixed” and that they were prepared to “make adjustments” according to circumstance. “We'll need to find some answers that can be adopted according to location,” said Carbonero. “The needs of people in Palma are likely to be very different from those in Sa Pobla, for example” he explained.

The Minister pointed out that the Balearic government has already allocated 60 million euros to the purchase of homes, many of which were on the free housing market but which will now be reserved for subsidised housing.

Pau Dols, Director of Sa Nostra bank, said yesterday that there was “absolute consensus” among the banking community about setting up the working parties. He said that the issue is not that banks don't wish to offer credit, but rather that the problem is one of cash flow.