Tag: short-stay rentals

The Balearic Islands Sets a Limit of 623,624 Places for the Tourism Sector

 

9 August 2017

The Balearic Islands’ government’s new law will enter into force to “put some order” into residential tourist rentals, with fines of up to 400,000 euros for platforms like Airbnb.

The Government of the Balearic Islands announced yesterday the enactment of a new law that limits tourism to a maximum ceiling of 623,624 places among all the islands, including hotel and non-hotel spaces. This “ceiling” comes into force amid controversy over the management of tourism and tourism-phobia, in the face of the latest incidents by radical groups. Of the limited spaces, 435,707 correspond to Mallorca, 109,800 to Ibiza, 60,117 to Menorca and 18,000 to Formentera.

The pioneering law includes fines of up to 400,000 euros to tourist accommodation rental platforms. The objective is to “put order” in the activity and gradually reduce the number of places available.

The Government of Francina Armengol (PSIB-PSOE) modified the PP’s previous law, permitting the councils of each island (Mallorca, Menorca, Ibiza and Formentera) and the Palma city council to determine whether they will allow tourist rentals in homes, for how long and in what areas. The institutions will have a year to decide on their course of action, though they are expected to stick to the ban.

The rental of apartments to tourists was already prohibited in a law promulgated by the PP party’s government in the previous legislature. Nevertheless, the modality had been allowed through the Law of Urban Leases. According to Tourism Minister and Balearic Vice-President Biel Barceló, the law aims to end “speculation” in housing rentals and to foster “responsible, sustainable and balanced” tourism. However, it will also affect the hotel sector, limiting the number of places.

The rental housing platforms will have 15 days to adapt to the new law, according to a statement that the Balearic Government sent to 30 of these companies. Otherwise, fines will range from 20,000 euros, in the case of owners who rent apartments to tourists, to 400,000 euros, for real estate, tourist intermediaries or digital platforms such as Airbnb or HomeAway.

Of the ceiling of 623,624 places, there are 120,000 that have been granted since 1999 under an exceptional regime which will not be renewed as they expire, to slowly reduce the total supply.

To prosecute illegal home rentals, the Ministry of Tourism will create an electronic platform for citizens to report the owners who rent them. The complaints will not be anonymous and will only serve as an indication of where inspectors should look.

For practical purposes, starting yesterday, home owners who house tourists in their home for less than 30 days, without a rental contact and without the visitor having paid a bond, is acting illegally and could be fined.

Airbnb said in a statement that the new law is “complex and confusing” and called for joint action “to help create sustainable tourism model that share the benefits among many, rather than leaving them in the hands of a few.”

The need for a new management model in the face of the strong increase in tourists – 30 million since 2010 – and the latest incidents against tourism by radical groups such as Arran in Palma de Mallorca have put pressure on the autonomous governments. Barcelona was the first city to announce measures, since tourism has exceeded the city’s capacity, where some neighbourhoods have had a transitory population of tourists greater than the population of regular inhabitants. Last week the San Sebastián City Council also announced a plan for the sustainable management of tourism.

The director general of Tourism of the Balearic Islands, Pilar Carbonell, reported that in spring a campaign was launched in Mallorca to clamp down on the advertising of rental homes to tourists through realtors.

Original Story: Expansión ProOrbyt

Translation: Richard Turner

Tinsa: House Prices Rose By 6.1% YoY In Large Cities In April

10 May 2017 – Expansión

House prices are continuing to rise sharply, boosted by an acceleration in the large cities and in the Balearic and Canary Islands, according to the latest estimates from the appraisal company Tinsa. Specifically, the price per square metre of properties rose by 2% in April with respect to the same month last year, according to figures published yesterday.

Although those figures are seven-tenths lower than those registered in March for the country as a whole, we cannot speak of a slowdown, given that the general trend over the last few years has been increasingly bullish. Moreover, the data also reveals a growing acceleration in several key markets, such as the large cities, where prices rose by 6.1%, and the Balearic and Canary Islands, where property prices rose by 4%.

In this way, the rise in house prices in Spain’s provincial capitals and large cities has accelerated by six-tenths with respect to the same month last year, to reach its highest rate since the outbreak of the crisis. This increase is being spearheaded by some of the prime areas of Madrid and Barcelona, where supply is constrained and demand is rocketing. Nevertheless, over the last few months, the price rises have been spreading to more and more neighbourhoods, given the strong buyer pressure in the most sought-after areas.

Meanwhile, property prices in the Balearic and Canary Islands are rising at a rate of 4%, driven by two main factors. On the one hand, the high level of demand from overseas buyers. On the other hand, the purchase of homes as investments, given that owners can rent them out easily for short-stays for most of the year, which raises their yields. Prices in these regions have fallen by 27.8% since 2007, i.e. by one-third less than the average.

On the other hand, this situation contrasts with the weakness in house prices along the Mediterranean Coast, in metropolitan areas and small towns, where there the stock of homes for sale is greater and demand is lower. (…).

Two speeds

(…). By way of illustration, house prices in the Mediterranean region are still 46% lower than their peak levels of 2007. (…).

In metropolitan areas, prices are still falling, with a decrease in property prices of 2.6%. That data also represents a slowdown of more than two points with respect to last month and is a kick in the teeth for a market that has seen its price plummet by 45.9% since the real estate bubble burst. The reason is precisely due to the fact that the crash in the market made house prices in the centre of large cities more affordable, which meant that most buyers did not have to move tens of kilometres away to buy a home.

Original story: Expansión (by P. Cerezal)

Translation: Carmel Drake