Construction in Palma.

Construction in Palma.

23-07-2021Pere Bota

The Balearic Construction Sector is booming and demand for luxury single-family homes is increasing all the time, but the gap between the top end and the rest of the market is widening and it’s becoming increasingly difficult to find affordable housing.

The data for the first half of this year was revealed by the Dean Marta Vall-Llosera from the Col·legi d'Arquitectes de Balears, or COAIB, and Demarcation of Mallorca School President, Joan Cerdà on Friday.

In the first six months of 2021, a total 2,864 works were approved in the Balearic Islands, which is 13% more than last year and an increase of 2% compared to the same period in 2019, making it the best semester since 2009, but less than the 3,716 works approved in 2006.

The total approved budget amounted to 711 million euros, which is 30% more than a year earlier; 24% more than in 2010 and the largest budget approved since 2008.

Between January and June this year, architects targeted 1,877 homes in the Balearic Islands, which is 12% more than in 2020 and around 20% more than in 2019.

The approved budget for these homes is 501 million euros, which is 13% more than 2020 and also higher than 2019.

Vall-Llossera and Cerdà have both warned of the rise of luxury housing; 1,129 of which were flats, which is 8% more than 2020 and 748 were single-family homes, up 20% from 2020.

"The recovery of new flats is insufficient to alleviate a problem that already existed before the pandemic,” said Dean Vall-Llossera. The flats represent 15% of the total built during the real estate boom, which she claimed was “the least amount of new housing created in recent history."

New single-family homes now account for almost half of those built in 2007. They are also more expensive, cover a larger surface area and are located mostly in coastal areas and in Palma, according to Cerdà.

Reforms

Vall-Llossera explained that the increase in reforms and the new builds in Ibavi are insufficient to alleviate the lack of affordable housing and said he supports the rehabilitation of housing and urban renewal and regeneration, which "must sustain the future of construction." He also called for a census of the housing stock in the Balearics.

Valle-Llossera and Cerdà believe that European funds offer an opportunity for rehabilitation and energy efficiency improvements.

Meanwhile, the Architects warned that endemic problems persist, such as excessive bureaucracy and delayed licensing.

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