A local pressure group, Salvem el Molinar, has pointed to what it believes is the problem of speculation and the effect it is having on the neighbourhood. Investors and foreign capital buy old houses, tear them down and build new ones. The character is therefore changing and long-standing residents are moving out.
María José Monzó isn't one of them. She and her husband bought a house on C. Vicari Joaquín Fuster towards the end of the 1990s. She says that there is hardly a day when they don't get letters from estate agencies wanting to sell their property. "But we're not selling."
María says that a perception that everyone living in El Molinar is rich is a wrong one. "It's not so. My husband is a pensioner, I am self-employed. We are middle class, like most of the residents who have spent half their lives in this area." They bought their house before the introduction of the euro. "Prices then started to rise, and the frontline homes were within the reach of people with money or foreigners."
According to data from the College of Real Estate Agents, the average price per square metre for homes sold between January 2019 and June 2022 in El Molinar was 4,132.16 euros. This price, well above the Palma average, has led to Salvem el Molinar warning of the "indiscriminate purchase of homes by foreign capital".
Spokesperson for the group, Toñi Fernández, says that frontline residents are being given "blank cheques". "This is the type of transaction that is being carried out in El Molinar." Sending a message to Palma town hall, she adds: "We are one step away from losing the idiosyncrasy of the area. We must prevent what has happened to the old centre of Palma. It's in our hands to do so."
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What us the problem here?? Is it that the existing local residents don't want the values of their properties to increase above the ratd of inflation and so don't want foreigners buying into their neighborhood??? I somehow doubt it, everybody wants their biggest investment to grow quicker than property elsewhere, that is one of the best ways to boost the family balance sheet over time! Is the real problem that the new wealthier residents are doing a lot of long overdue renovations, improvements and extensions but that a lot of these renovations are in bad taste, inconsistent with the heritage of the area and thereby the character of the neighborhood is getting diluted. If this is the real problem, then the fix is surely not to ban wealthy foreigners from buying the properties, instead to tighten up the planning approvals and limit the roof top extensions possible, the plate glass balconies, the removal of the shutters etc etc. Then everybody sees a benefit, the charm is maintained, the local families continue to see nice price growth in their primary investment and a previously slightly neglected part of Palma gets some much needed care and investment but under stricter planning regulation.
If you put a house up for sale, it will be sold at market price, whether it's a foreign buyer or not. Blocking foreign buyers will only make it harder to sell it (and open a larger can of worms). And it could lead to market stagnation. If you don't want to sell, then don't. Another country made the same mistake based on anti-foreigner sentiment, and look what it did for them.
If they don't want new houses in the area, they could always put a condition on the houses they can't be altered on the outside.