The regional government of the Balaeric islands has called on the Spanish parliament to follow a recent precedent set in Canada and ban foreign buyers from the islands of Mallorca, Majorca, Ibiza and Formentera.
The islands are popular tourist destinations with around 40% of sales going to overseas buyers in 2021 according to government figures. Sale prices across the islands are the most expensive of any Spanish region with idealista currently tracking them at €3,706 per square meter at the time of writing (compared to €3,122 in Madrid).
The local government is studying the possibility of limiting home buying in the region to those who have lived in the Balaeric Islands for a minimum of five years. Experts say that any implementation of the proposal could come into conflict with the rights of citizens of EU countries to free movement within the block and might not have the desired effect on house prices.
Any ban on foreign buyers would have a palpable negative effect on specialist property portals such as Kyero, A Place in the Sun and others that list Spanish real estate for foreign buyers.
"After the Costa Blanca and the Costa del Sol, the Balearic Islands typically represents the third-largest region in Spain for leading international property portals. So it stands to reason that if the new rules came into effect, this would kill those markets overnight and agents there would be forced to stop advertising to foreign buyers", said local real estate consultant Alfredo Bloy-Dawson.
Bloy-Dawson, who works with portals and agents in the Spanish market, doubts that the controversial ruling will come into effect both because the EU is unlikely to allow it and because of the potential impact on the local economy.
"Personally, I think it’s nonsense and they are just piggybacking on the news from Canada to gain votes at the forthcoming elections in May."
Property is a hot topic in Spain at the moment with portals like idealista and Fotocasa having declared their objections to the central government's recently enacted housing law which they say is keeping rental stock from coming to the market.