Panic in Spain as housing crisis sparks fears locals 'will be expelled' from communities

The stark warning came ahead of Spanish PM Pedro Sanchez's visit to Palma on Saturday. (Image: Getty)

Property business leaders in the Balearic Islands have warned citizens being priced out from housing market risk being effectively "expelled" from their communities without action from authorities. The warning came from ABINI and API, two Balearic property agency associations, who sent a letter to the Spain's Prime Minister Pedro Sanchez ahead of his visit to Palma in Majorca.

In the joint letter, the two organisations called for urgent measures, without which "our society will be condemned to expelling its own citizens due to the inability to find a home", as per Spanish English-language news outlet the Majorca Daily Bulletin. The associations insisted that housing is a "right" rather than a "speculative asset", and called for interventions which discourage speculation without hindering "responsible investment and the housing supply", as per the outlet. It follows a surge in large-scale protests from locals in various Spanish holiday hotspots over tourism's impact on the cost of living and housing.

Panoramic view of the harbor and old city of Palma de Mallorca (Image: Getty)

Sanchez (pictured) has proposed various measures to tackle the housing crisis. (Image: Getty)

A report by property portal pisos.com last month suggested that the average cost of renting across the country has skyrocketed more than 20% over the past five years.

The figures suggested that average rental prices across the country went from €898.34 (£748.36) per month in January 2020 to €1,125 (937.18) in January 2025, representing a national rise of 20.15%, as per Canarian Weekly.

The report put the startling increases down to population growth in major cities, property shortages, as well as a growing demand for holiday rental accommodation, as per the outlet.

Hans Lenz, President of ABINI, previously told the outlet that a 100% tax on the sale of Spanish homes to non-residents from outside the European Union previously proposed by Mr Sanchez was a "silly law" emphasising that the lack of housing stock was the issue, not the desirability of Spain to foreigners.

The PM has previously warned the West "faces a decisive challenge if it wants to avoid becoming a society divided into two classes: rich landlords and poor tenants".

Tough measures Mr Sanchez has tried to put forward in response have proved difficult to bring into law due to powers held by regional authorities, barriers in the form of European law and his lack of a majority in Parliament.

But the two associations said they hoped his upcoming visit could be the start of a "turning point in beginning to build the foundations of understanding between different political forces, putting aside differences and prioritising the well-being of the people of Mallorca and those who have chosen our islands to live".

"Housing cannot continue to be used as a political battleground. While the different parties accuse each other of inaction, families see their chance of having a home in their own land slipping away.

They added that while they were speaking on behalf of their sector, the sentiment "is shared throughout Balearic society".

"It is a concern that affects workers, business owners, young people, families and the elderly, because the right to decent housing has become an unattainable luxury for many," they added.

Spain's Ministry of Housing and Urban Agenda has been approached for comment via email.