The luxury end of the market has been unaffected. | Antoni Pol

Increased demand for housing and its shortage have made the Balearics one of the most expensive regions in the country, and this situation is not about to change. Sandra Verger, the CEO of the Association of Builders, says that the average cost of building a new home is around 300,000 euros, taking account of taxes and the costs of land and various reports.

She stresses that this is the average and that there are therefore areas where the costs are lower. She adds that the pandemic has not affected demand at the luxury end of the market but has been negative for the majority of the islands' residents. Because of this, she argues that urgent action is required.

The construction industry, while it hasn't avoided the economic impact of the pandemic, has been far less affected than the likes of retail and tourism. Construction can therefore help to lead economic recovery through measures which favour the industry and at the same time help to alleviate the problems with affordable housing. Verger warns that without these measures, construction activity will drop off over the coming months.

There doesn't need to be a change to legislation, but there does need to be greater speed with granting licences and incentives for rehabilitating existing housing stock. With licences, these should take no more than three months and not the eighteen, which is currently common.