Homeowners in Majorca are increasingly choosing to let out rooms to exploit the difficulties with accessing accommodation and the high prices to rent full properties.
Natalia Bueno, the former president of the API Association of Real Estate Agents, warned people who own homes on the Spanish island rent out rooms to make ends meet for many years.
However, now there are an increasing number of cases, particularly in the Majorcan capital of Palma, where rooms are being rented out to tourists to exploit the difficulties with accessing accommodation and the high prices to rent whole properties.
By renting out single rooms rather than whole properties, owners can avoid certain obligations under the Tenancy Act that protect tenants.
“It is totally unfair competition. They do in fact rent the entire property, but they resort to these tricks to circumvent the law,” Bueno said, reported the Majorca Daily Bulletin.
Income is also generally higher, which also tempts homeowners to make the switch. The average price of renting rooms in Palma is €500 (£418), according to the property website Idealista.
The average cost of renting an entire apartment, meanwhile, is about €1,000 (£835).
With a three-bedroom apartment, therefore, owners can receive €1,500 (£1,253) – around €500 more.
There is also lower risk. In the event of one tenant not paying the rent, the losses are not as great as with “tenant-squatters” of whole properties, assuming that the other tenants are paying the rent.
However, avoiding compliance with the Tenancy Act can mean that tenants cannot declare themselves as “vulnerable” – “Owners can throw them out of their homes at any time,” said Bueno.
They are doing a lot of harm to real estate agencies and to citizens,” Bueno concluded.
Majorca is currently suffering from high property prices, which are estimated to rise by a further eight percent by the end of the year, according to estimates by Ricard Garriga, CEO of mortgage brokers Trioteca.
Several other estate agency associations and property websites have agreed with Garriga’s analysis and have shared what are now very familiar reasons as to why there is a housing crisis in the Balearics, and Majorca specifically.
“The Balearic Islands have the highest demand for housing in the whole of Spain. The Mediterranean climate and its extraordinary natural environment make the islands a highly desirable place, both for local citizens and for foreigners with high purchasing power,” said María Martos from Fotocasa.
“However, the island territory is limited. Expansion of housing supply is therefore more difficult than in other regions. The imbalance between supply and demand is great. In addition there is a totally insufficient amount of social housing, and this pushes prices up.”
House prices are one of the primary concerns of residents in Majorca who have been protesting about the effects of mass tourism. Properties are being bought up as holiday homes by wealthy Northern Europeans from the UK, Germany and Sweden. This is leading to “an exodus” of workers from the Balearics, as they move to the mainland in search of somewhere to live.
Orlando Lobo, the owner of Transportes Transatlántico removals, said demand for his services was so high due to exorbitant property prices that he had to add two more trucks to his fleet.