By Andrew Ede
Hans Lenz is the director of Engel & Völkers in Mallorca and also the president of the ABINI Balearic association of national and international real estate agents. Given a strong focus on sales to foreign buyers, there are those who accuse him of having contributed to the high price of housing in the Balearics. He accepts his role in this equation but maintains that the housing crisis has deeper roots.
"It is true that foreign demand makes prices rise, but this is linked to the lack of land and planning that has not been adapted in height and densities to allow a more vertical city (Palma, that is). Putting all the responsibility on international buyers is wrong; they are only part of the story. Resident buyers rarely compete for the same product with foreigners who are looking for a second residence."
He says that there have long been differentiated niches in the islands' property market. "Sixty to seventy years ago, there were developments in tourist areas that were dedicated to foreign clients. Foreigners are now singled out for their involvement in the housing market. But the main reason there is no housing at an affordable price – say, between €200,000 and €250,000 – is that it is impossible to build it at these prices. It simply cannot be done."
Of one government initiative to provide more public housing - expropriation from large owners - he is critical of the fact that "the result is 30 homes with which you do not solve the problem". "And with the development of public housing, which is very commendable, you don't solve anything either, considering the amount it creates. The developers estimate that around 20,000 are needed to meet the current housing demand. while the government speaks of 7,000 a year. But production is below 3,000 and continues to decline. We are going in the opposite direction to what is needed. It is an endemic evil that will impoverish us. Ironically so, because at the same time it is what generates 70% of tax revenue."
He points to initiatives elsewhere. "Vienna has had a public housing development for 100 years by which public land is ceded to develop housing for sale or rent. It costs the administration nothing because it is public land. After around 40 years, once the investment cycle is over and when developers have taken their share, buildings become the full property of the city council."
Lenz has strongly condemned the Més proposal to limit the sale of properties to foreigners. "When political parties raise certain things, I think they should have done an in-depth study of the subject beforehand, because they can confuse people and create a confrontation that leads nowhere. Restricting freedoms framed in the European Union is not going to lead to the desired result; it is a dead end. We should have had this debate 20 years ago. We must now provide solutions from a union of the property sector and the government in order to find formulas that produce a type of housing that doesn't exist at present."
September 19, 2022 at 11:19AM
via Mallorca Daily Bulletin read more...
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