Few weeks after the start of the summer season, the Balearic Islands Government, entities and companies continue to laps with the Holiday Rental Law.

Earlier this month, the bill that will regulate holiday rentals in the Balearic Islands was approved by the Government Council after incorporating 200 of the 294 allegations it received in the public information period to which it was submitted.
These days, fourteen entities have adhered to the manifesto «Quality tourism for all».
This manifesto has been promoted by the Association of Holiday Rental Apartments and Homes of the Balearic Islands (APTUR) in defense of the holiday rental, with the aim of obtaining the highest number of accessions and demonstrating social support towards holiday rentals.

The entities that have signed the document are: PIMEM, PIMECO, AFEDECO, ACOTUR,  municipal markets of Santa Catalina, Pere Garau, El Olivar and Inca, AMAT (Mallorcan Association of Tourist Attractions), ABONE (Balearic Association of Nightlife and Entertainment), Municipal Taxi Automotive Association (AMTAT), the Association of Golf Courses of the Balearic Islands, the Business Association of Rental of Vehicles and the Association of Nautical Companies of the Balearic Islands (AENIB).

The signatories argue that holiday rental is an aid to the local development of areas that could not have had the opportunity to access the income generated by tourism with the offer of traditional accommodation. APTUR-Balears states that vacation rental is a complementary accommodation model where the end user decides based on privacy and flexibility arguments. It also stresses that it is transverse from the point of view of sharing the benefits of tourism between the complementary offer and helps reduce the seasonality.

The entities affirm that they are looking for a regulation of the appropriate sector in which everyone can develop this activity with guarantees and fulfilling their fiscal responsibilities.

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The price of housing for rent in the Balearics has experienced unparalleled growth in recent times. In the first quarter of the year the increase was 15.9%.

This situation has led prices to stand at 11.8 euros / m2. Overall, the year-on-year growth rate was 18.6%. In addition, the price increased by 11.7% in Palma to stand at 11.7 euros / m2. It’s precisely in Palma where the owners have increased by 11.4% the price of their rental properties. The price of long time rental housing rose last year by around 10% in the most expensive properties and over 4% in those with the lowest monthly rates. It is almost impossible to find already in some areas of Palma leased flats throughout the year. The most complicated, Santa Catalina, Borne, Palma Old Town and Molinar.

The origin of the situation is in an enormous growing demand formed by two distinct groups. On the one hand, all those people who have been forced to go to the rental market because they can’t afford a purchase. Many could afford a mortgage payment but do not have the necessary savings to pay the entrance (about 30% of the value of the apartment).
And on the other hand, that large number of people who voluntarily choose to live for rent even though they can opt for other options, aware of the sacrifices and risks involved in signing a mortgage in the long term. The current situation is unprecedented in Mallorca, and it also puts its average prices well above what the islanders’ pocket can assume. According to the information provided by this group, in the month of April it is almost impossible to find in Mallorca a flat that is rented for less than 600 euros per month, in the case of Palma and the main tourist areas, the offers that are currently below 1,000 euros per month are at minimum levels.

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Mallorca was the autonomous community in which more immediate rents were made in the month of February. That is, leases in which the advertisement was less than two days active. To all this must be added the fact that the center of Palma is being taken literally by Swedish citizens, who are making millionaire investments acquiring entire buildings to be used later to holiday rental.

According to the predicted data, it seems that the situation will remain this way at least 3 years due, especially, to the tourist success. In addition, the National Institute of Statistics (INE) predicts that the Balearic population will continue to increase by an average of 2,400 people per year during the next 10 years.

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The Governing Council of the Balearic Islands has recently given its approval to the draft law that will regulate holiday rentals on the islands after incorporating 200 of the 294 allegations it has received in the public information period to which it was submitted.

The document explains the novelty of not allowing tourist rental in housing of less than five years (initially was a period of 10), and during that period, the use of housing must have been private residential and will be accredited by the declaration of new construction. In the same way, it defends the fact that it is the communities of neighbors that decide whether in their building can be rented or not the houses to the tourists; and that all that channel that puts in contact offer and demand, will be considered channel of tourist commercialization.

At the moment, the project must be submitted to the parliamentary process that will introduce amendments and modifications so that it can enter into force, although it will not be before September of this year. The regulation of the commercialization of tourist stays in houses, the so-called tourist rental, will answer to a «reality» that exists in the Balearics and will allow to have a tool in enforcing the law.

A specific register will be created in which all the homes that are being commercialized must be registered, implying that all the illegal offer can’t be commercialized by tourist offers channels. In this way, any commercialization channel will have to put the number of the legal registration of activity of the house, including the platforms that announce in its web pages apartments for the holiday rental.

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To this, must be added that rent will not be allowed in apartments of less than five years old. The Consell de Mallorca will create a second bag housing specific places for holiday rental, different from the hotel rooms, to exchange new law dictates touristically for those wishing to market a house or a flat. It will also set some «objective criteria» for zoning, which should be observed by all municipalities, including Palma.

In view of these criteria, the Balearic Islands Association of Apartments and Holiday Rental Homes (Aptur-Baleares), states that despite sharing many of the objectives of this Government, the regulation made leaves out 80% of the current bid. In addition, they point out that difficult technical and accessibility requirements are imposed and a single bag of places is established, without specifying which ones will be allocated to holiday rentals and which ones to the hotel sector. The association is against the decision to establish that any contract less than 30 days is considered as a tourist, as well as being considered a marketing channel either a web, as an advertisement in a printed newspaper or as the showcase of a real estate agency.

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