Author Archives: akinloch

Palma Mayor to authorize the building of 1.200 social housing units

Palma City Council will build 1,200 social housing units on eight residential plots that will be social or at a 90 percent of market value. Mayor Martínez has assured that eight plots will be developed as soon as possible, also taking advantage of the housing emergency decree, which allows for increasing the density of construction or the change of use of plots to build homes. 

Martínez has warned that, “in no case, the sale of these homes to private entities is contemplated. These properties will become part of the municipal heritage”. Currently, the Municipal Housing Board has 398 homes. The idea is that they can be ready before the end of the legislature.

The Balearic Government considers limiting foreign home ownership

Iago Negueruela, Minister for tourism and industry, called for a deep debate on how to limit the purchase of homes to non-residents on the Balearic islands of Mallorca, Ibiza, Menorca and Formentera.  The islands have traditionally been a second home haven for wealthy Northern Europeans.    

This motion, along with others to reduce the population and over-construction is now being hotly debated.  Sustainability, quality of life and an accessible housing market for locals appear to be the objective, along with the prevention of the islands becoming “second home ghettos “. 

Approximately 35% of properties sold in the 3Q of 2022 were to foreigners.  This is generally in the most expensive sector, which leads to a knock-on effect on prices further down the housing ladder.  

Limitations on second homeowners in places such as Andorra, Denmark and Malta are being studied carefully. 




Javier Mato article on the current housing crisis in the Baleares.

An excellent article questioning the current political model. We have translated below if needed.

Housing: A failure without a cure

Why is housing in the Balearic Islands totally inaccessible for a worker today?

Prices, including real estate prices, are always determined by supply and demand, which means that we are either facing an excess of buyers, or a shortage of properties, or a combination of both. This gap is quantifiable: tens of thousands of additional homes are needed. Developers are not providing them, which is their raison d’être, as a result of erroneous political decisions made over the years.

One reason is the lack of land. The Balearic Islands’ politicians compete to be the most ecological, reducing or removing buildable land – not only in protected areas, which is plausible, but also where there is nothing to protect. What environmentalism can there be in that today where between two six-story buildings in Palma, only one block of three is allowed? In addition to being foolish, it unnecessarily restricts this type of supply.

Today in Palma there is very little land left and what is available, is selling at the price of gold. As a consequence, the land costs end up adding about 800 euros more per square meter of a dwelling, one hundred thousand euros on average, with an extra forty thousand euros if a building has to be demolished. A developer recently told me that this week, he saw a plot on Calle Manacor suitable for a 19-storey development, for two million two hundred thousand euros, plus the demolition costs of the existing house.  In this case, these costs would amount to a 40% surcharge .

A second significant factor is the cost of real estate transactions in the Balearic Islands and Spain. In the case of secondhand housing, the property transfer tax was increased by the Balearic Government by almost fifty percent as a result of the 2008 crisis.  On top of that, agency and legal costs are excessive, being at a rate much more typical of an underdeveloped country with very few or cheaper transactions.  

Municipalities increase costs catastrophically while processing building permits. Although. in theory, they have a maximum of three months, in Palma they are taking around eighteen months. This uselessness is disguised as rigor. This makes housing more expensive, as there are loans and interest to pay. It is estimated that five thousand euros are added per home due to the inefficiency.  Building a property can involve up to five layers of administration,  all slow and complicated, making everything more expensive.

Another factor is the absence of social housing. For about ten years, practically no developer has built social housing, simply because the Balearic Government has insisted on applying unfeasibly low prices (1,940€ per square meter in Palma, now slightly improved, but still insufficient). The politicians’ intentions look very nice in their initial manifesto, but as they are not realistic and there has been no cooperation, the result is that new social housing built by private developers has almost disappeared. 

There is state-promoted council housing, but it is better not to talk about this as there is so little.  Of course, the designs appear in architecture magazines, which is not exactly the most needed in this crisis. They build so few that they can even send a politician to deliver the keys to each successful bidder.

This situation also extends to the rental market. Having allowed the touristic use of dwellings they have removed these properties from the market for residents. 

They are also treating homeowners as an enemy under suspicion. Those who want to rent know that neither justice nor power will protect them. The absolute failure in the housing market is a result of the lack of realism by our politicians. You cannot manage a market where home ownership is considered shameful. This is a business where without supply, prices will skyrocket and the victim will be the citizens.    The island must be protected, but not by preventing housing on rural land and prohibiting ownership for the working and middle classes. Open spaces need to be “enabled” for living. The alternative is to go for a model contrary to Europe and the market economy, based on public intervention, which has only failed in countries that have tried this model. The ignorant people who govern us have already mooted this idea of limiting prices, which will make the situation more chronic.  It is like blaming the firefighter for the fire. They must learn to be pragmatic. If not, their only option will be to flee after the failure.

The Balearic Government wants to limit foreign property purchases

The Balearic Government creates a committee made up of members from the government, the university and lawyers will look into ways of limiting the number of foreigners buying properties in the Balearic Islands after a MES motion was approved.

The objective will be analyzed in the context of European Law, which specifically allows for the free movement of its people and capital. 

The idea is to reduce demand, thus leading to a fall in house price values, making them more accessible to locals, who are struggling to buy property at present on comparably low wages. 

The idea is to convince the EU that the Balearic archipelago is unique and therefore limitations are necessary for sustainability.  

Spain to offer visas to foreign digital nomads.

The Spanish Parliament has approved a new law that will allow digital nomads a visa to stay, with an anticipated corporation tax of 15%.    

The law was introduced as Spain needed to be more attractive to businessmen and other entrepreneurs, as the country in 2015 was ranked among the worst countries in the OECD to start a business in. 

There are some limitations though, including a minimum salary of 2,000€ per month, a company active less than 5 years, revenues up to 5m€ pa etc. 

Other benefits include a 50,000€ employee exemption on stock option.  It also claims third-country nationals will be able to register a limited company in 6 hours. 

Military Permit Mallorca

Since 1st January 2021, when the UK left the European Union, it is now necessary to have a permit from the Ministry of Defence when buying property on rustic land. It should be clear that this rule does not affect properties in Urban areas.

At the same time, they will check for a criminal record and require a plan of the property and land.

This is, in fact, an old law drafted in the last year of the Franco regime (Royal decree 689 published in 1978) in order to protect national security. It has been used for non-EU purchasers for over four decades.    

At the moment, this affects all non-EU purchasers, except the Swiss and Norwegians, who already have an exemption agreement in place. 

The Balearic Property Registrars College recognizes this is not going to help investment in the islands as the process at present takes about  6 months. 

It should be noted that the permit is property and person-specific so you cannot get the permit in advance when for example, you start searching for a rural property.

At Property Works, sadly, we are seeing vendors turn down good offers from Brits as they do not wish to wait for the purchaser to obtain this permission, much preferring an EU citizen who can complete with less fuss or delay.   

We have also heard that in some property registers (Ibiza), they are allowing properties to be registered with the clause “pending military certificate”. This appears to be an exception and potentially risky for the registrar and notary if the permit is denied.

Hopefully, this rule will be changed soon. There is significant pressure from all sides, especially agents and lawyers to remove this unnecessary layer of bureaucracy. 



Brexit 2019

A report about how Brexit will affect the Balearic property Market by John Kinloch for Sotheby’s Mallorca here

Price variations in the Balearics

Article by the Secret Surveyor.

Knowing whether the price of the average property is going to increase or decrease is key for investors looking at the property market. We are going to lay out some predictions and show a general overview of the trend of property market prices in the Balearics.


  • 3rd most expensive region in Spain with an average price of m2 of 2272 only behind Madrid and Basque Country.
  • 3rd region which has grown the most since 2015
  • At one of the highest points it has ever been

Only real case of growth since 2004

When analysing the price of property in the Balearics it is interesting to note that official valuations are much higher than they were at the pre-recession phase. As opposed to the rest of Spain, the Balearics average price of $/m2 is 23% higher than what it was in 2004. This is the only real case of significant price growth in a large region in Spain. The only other regions which shows a similar trend are Galicia, Extremadura and Cataluña all with growth under 10%.    

It is in fact in one of the highest points it has ever been. Current price of property is only behind years 2007 and 2008.

There is growth but it is slowing down.

The Balearics show strong growth in the last 3 years. Price’s have gone up significantly: since 2015 they have risen by 13% making it the 3rd region with biggest growth in that space of time.

However, in 2018 there is a significant change: in comparison to 2017 there is only a 3% increase. Opposite to the 2015-2018 period, during this year growth is below the average in Spain. In the last quarter of 2018 change was of only 0,4%, significantly below the average in Spain and one of the lowest quarterly growths in recent years.

Why Balearics has been so strong

Inland Spain was significantly more affected by the property crash than the Balearics:

  • Foreign Investment. Balearics wasn’t as dependent on local market and hence demand for property didn’t fall as much as in other regions.
  • Luxury market: known to be much more stable in recessions, the Balearics has one of the biggest luxury markets in Spain.

Will prices keep going up?

Balearics have historically been a very strong growing market yet growth seems to be slowing down. In fact, what makes the Balearics a strong market is islowing down the growth.
The Balearics are a strong stable market as mentioned due to the size of the luxury market and due to foreign investment.
Two key exogenous factors have caused these pillars to cause stagnation:

a) Macroeconomic tensions: Brexit, yellow vests, Trump, Putin… 2018 has been a year full of uncertainty and political tension. 2019’s prediction is uncertain for everyone. Brexit exemplifies how this affects the property market. British citizens (historically one of the strongest buyers in the market) do not know whether there will be any changes in tax payments, regulation or even their rights as EU citizens if they buy a property in Spain. This undoubtedly has caused, and will cause, property markets to stagnate.

b) Local legislation uncertainty. The Balearic government, and especially the Palma Town hall, has created and changed laws regarding property during their whole legislation. The mayor of Palma is in fact being taken to court regarding a controversial law regarding property rentals. As with foreign buyers, uncertainty is causing many buyers to not buy in Palma and the Balearics.

Will prices keep going up? The market is stagnated. There are however positive signs: Brexit deal looms and there are going to be regional elections at the beginning of 2019 in the Balearics. It would be impossible to give a realistic prediction yet the mere fact that part of the uncertainty will be taken out of the equation will most definitely help the property market.

All data is taken from the official Ministerio de Fomento 2019 document. Find the methodology in:

Balearic government aims to phase out Green house emissions by 2050

A bold move by the Balearic islands’ government to phase out greenhouse gas emissions by 2050 is being considered in a new green manifesto, which includes banning diesel cars and changing all street lighting to LEDs.

Other plans include

  • buildings with roof spans of more than 1,000 square metres – car parks, hospitals, supermarkets and sports stadiums will host electricity-generating solar panels.
  • Coal plants will be phased out by 2035,
  • All car hire fleets on the islands will be electrified.

Francina Armengol, the president of the Balearics’ socialist-green government, said  “It has to be this way if the law is to be more than a mere statement of intent.”

Joan Groizard, the islands’ director-general for climate change said the move put them on a path to confrontation with Madrid, and his government was studying the legal implications very carefully. There is a live debate about what regions can and can’t do, and this requires careful consideration.

He states “We can’t ratify the Paris agreement on our own but we can take a decision to adhere to it. Climate change is already having a big impact on our islands and hopefully, our actions can have a knock-on effect elsewhere.”

The Balearics government says that if its climate plan is blocked, it will refuse to upgrade its Alcúdia coal plant in Majorca in time to meet a 2020 deadline for new EU emissions limits.

“If we sit on our hands and do nothing then on 1 January 2020, the plant will not be able to work, because it will be in breach of the EU legislation,” he said. “We are hoping it won’t go that far. But we do have pockets of sovereignty – or power – that we’re planning to use if we need to.”

Your own flatpack house for 30,000€ built in 6-7 hours?

New homeowners are looking for inexpensive, unique, greener, and smarter homes that are durable and energy-efficient at the same time. Prefabricated homes are one solution.

Architect Renato Vidal from Italy has designed a miniature home that he claims can be built in 6-7 hours. It is built in a factory, doesn’t need concrete foundations, and can also be upgraded to run off-grid.  It is claimed to earthquake resistant

The foldable design was created by Italian architect, Renato Vidal
All basic models include a fitted bathroom, kitchen connections and technical installations

The best bit is that the homes can be folded up and transported when you get bored with the location.

Too good to be true? Perhaps, as the 30,000€ quoted is for just 27m2, below the minimum permitted size of a habitable property in Spain.  The larger 2/3 bed models are much more practical and appear to be priced at about 60,000€.  Land costs, site purchase and fees would have to be added to the equation.

Prefab homes are the homes of the future. The exceptional convenience, cutting-edge architecture and eco-efficiency are everything that a homeowner would love to invest in, especially in these changing times.