The sale and purchase of homes by foreigners in the Balearics has already slowed down during the third quarter of the year in the midst of the talk about restricting the non-resident market.
The latest date on real estate transactions from the Association of Registrars show that the rate of sales fell in the Balearics in the third quarter of the year by 3.19 % compared to the constant rises of previous years.
That said, up to October of this year, almost one out of every three property transactions made in the Balearics was by carried out by a foreigner: 31.46%.
But, sales fell for the first time in months in the Balearics at a time when this type of transaction is on the rise in the rest of Spain. Other territories where the density of purchases by non-residents is as intense or more so than in the Islands maintained positive records for purchases up to October.
The apparent slowdown in transactions is not yet having an impact on the moderation in prices, which is one of the reasons the government wants to limit the foreign market.
The Balearics is the second community and the third province in Spain with the highest house prices.
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Ulla JacksonUlla, it was actually a bit of a dig at one contributor here who recently parroted that tired old term in context of foreigners (the non British type). Foreigners = non Brits, naturally economically challenged. They take our jobs and live on benefits which of course means "somebody else's money" (they're all "socialists" after all). Therefore the logic is that if foreigners are buying up Mallorca property, it must be with somebody else's money. Most likely Sterling, because they took our jobs and live on benefits. Does that explain it?
Morgan WilliamsJust a comment to your "charming" answer to my question. It's obviously not enough to read and write Engish but it's needed to know the history of UK politics, their past PM's etc. in your view to understand the "hints". For your information MDB it is not needed for the readers to know the details of the UK politics as this is a paper concerning the life, politics and news on this island, not any island (read the UK island, in this case).
Morgan WilliamsThe same is happening in Malaga - rents and houses prices going up and up. It applies to anywhere that is popular I suppose.
Christopher GrubbWell if houses prices drop that will be good news for first time buyers and the tens of thousands of local people you presently cannot afford to buy somewhere. The government's job is not to do what is best for rich non Spanish people wanting a holiday home.
It's probably also worth pointing out that Mallorca isn't the only place that's in the middle of a property price boom. We sold a property in Munich in 2017 ... for triple what we paid for it. Today, that same property is on the market for double what we sold it for. So, should Munich also legislate restrictions on foreign property purchases? Oddly, there's no such proposal on the table in Bayern.
Christopher GrubbAnd yet, other than an MDB article speculating that a small drop in property purchases, in the middle of a property boom, facing a global economic downturn, there's no tangible evidence that anyone is at risk of purchasing a property in Mallorca, other than paying property boom prices. Further, the legislation proposed is facing quite an uphill battle, not the least of which is that the outcome, as you point out, would not only be bad economically, but contrary to EU law. On top of that, the local Malloquin population has been becoming quite wealthy from it for decades. The tide is clearly against it. Yes some sort of legislative action to minimise the upward price spiral may be enacted at some point, but it's unlikely to resemble what a minority of the current government is proposing. The fact remains... If you buy a property now, nobody's going to kick you out for being a "foreigner". Ever. It's more a matter if whether you're willing to pay the current inflated prices due to the current property boom, which will quite likely subside as the global economy continues to slow.
Christopher GrubbChris I think the word your looking for is Confidence… A small but significant word. That in the real world belief supports investment. Without it, it’s called risk Investors ask for a premium for risk. With property particularly at the international buyer end in Majorca means as you say a sales discount.
Morgan Williams clearly doesn't understand basic economics. Just the threat of new legislation must be impacting demand for property already, if the threat of new legislation grows, so will the uncertainty and potential buyers will look elsewhere. Anybody trying to sell property whilst all this plays out will probably be forced to discount the price. If the legislation is enacted finally, then a permanent reduction in potential buyers fir Mallorcan property will cause a significant reduction in the price of real estate, especially in the part of the market where non residents dominate. Any home owner, local or foreign should be very concerned by this likely drop in the long term value of their main family asset......nobody wants that!
Ulla JacksonIf I need to explain it, then you aren't going to get it anyway. Hint: review historical remarks of Margaret Thatcher
Erm... If you want to buy a property, what's stopping you, exactly? Or is it that you *might* want to buy a property someday but aren't sure? You know, because someday, maybe the handful of turkeys that are proposing this nonsense might miraculously overcome all of the many barriers to voting for Christmas? Maybe? You may not be aware, but if you live here and own a property, there's not an ice cube's chance in hell they'll be kicking you out for being a foreigner in 10 years from now (by the way, "foreigner" means "not Spanish" in this context, so it applies to Brits too). And true, 3% isn't a big number, and it's more likely the result of global economic uncertainty than anything else. It's not clear what would prevent anyone from buying right now. Other than the increasing prices, nothing else has changed. Even if it (miraculously) did change, it wouldn't be for years to come, and won't affect existing property owners. Of ANY nationality.