Latest News from Local Spain
Local Spain
3 hours ago
- Business
- Local Spain
Ibiza limits tourist cars, caravans
From June 1 to September 30, the daily number of vehicles used by non-residents is now capped at 20,000, the local government explained to one of the island's newspapers, El Periodico de Ibiza y Formentera. Of those, 16,000 are rental cars available on the island, while the rest of the quota is for private cars making ferry crossings, as long as they get a prior authorisation to do so. Caravans also need to show they have a reservation at a camping site, and are not allowed to be parked anywhere in the countryside. Motorbikes are excluded from the seasonal restrictions. The head of Ibiza's government, Vicent Mari, told the newspaper that the change was to "guarantee the sustainability" of the island, which has 150,000 inhabitants but receives some 3.6 million tourists per year, along with the smaller Formentera island nearby. Official statistics show that the number of vehicles on the island's roads quadrupled over the past two decades, from 51,000 in 2002 to 207,000 in 2022. Mari said various interests operating in Ibiza -- including car-rental firms and big companies -- had resisted the limits, but argued that were necessary "to regulate and control unsustainable (tourist) flows". Formentera island already restricts vehicles, and another Balearic islands hotspot, Mallorca, is planning to do so next year. Altogether, the Balearic islands attract 19 million tourists per year, a sizable part of the 94 million who visit all of Spain, which is the second-biggest destination for visitors in the world, after France.
Local Spain
a day ago
- Business
- Local Spain
Inside Spain: Another bid to limit foreign buyers and house brands rule
If foreign property buyers from wealthy Western nations currently feel targeted by the Spanish government, it's not hard to understand why. In April, Pedro Sánchez's administration scrapped the golden visa residency scheme which gave non-EU nationals Spanish residency in return for buying property worth €500,000. Last week, the ruling Socialists officially lodged their proposal to charge a 100 percent tax on non-EU non-resident property buyers, effectively doubling the price they pay for homes in Spain. There have also been proposed foreign property ownership limitations put forward by authorities in the Canaries and the Balearics. And most radical of all was the suggestion submitted by Catalan separatist party ERC to require actual foreign residents to apply for a permit to buy a Spanish property if they haven't become permanent residents yet. In other words, if they haven't officially resided in Spain for five years. This proposal was rejected by Spain's Congressional Housing Committee in late April, but now ERC are trying to get such a law passed only in Catalonia. The idea is the same as that shelved a month ago - a regional authorisation system whereby foreigners planning to buy a home would first have to prove their eligibility by applying for a permit from the housing department of the region where the property is located, in this case Catalonia. The criteria for this would be first proving five years of continuous residence in the country, so it would exclude those with a temporary resident card from being able to buy a home. The initiative will be debated in the Catalan Parliament next week. 'You can't have a situation where a firm on the other side of the world buys real estate for speculation,' ERC MP Mar Besses said. ERC's Secretary General Elisenda Alamany has also defended the proposal by saying that 'we want people who buy to show their commitment to the city (Barcelona), as it's the way to guarantee our identity and communal lifestyle.' Both points made by members of ERC are certainly valid and understandable, but they seem to be more directed at investment companies as opposed to the temporary residents who they are looking to stop from buying homes. Can their residency in the northeastern region and desire to buy a home there be considered 'speculation'? Just as is happening with the crackdown on Airbnbs in Spain, the lines between huge businesses focused just on profits and people with one or two homes in Spain are becoming blurred. Protestors hold a banner reading 'The neighbourhood is not for sale' during a demonstration to demand better access to housing in Barcelona on November 23, 2024. (Photo by Josep LAGO / AFP) In other matters, there was a time not long ago in Spain when buying Mercadona's Hacendado house brand was almost seen as defining one's class or socioeconomic status. The idea for many was that if these marca blanca (house brand) products are cheaper, they must be of a worse quality. It's a silly concept most of us are guilty of at some point, one which doesn't factor in the lower cost of distribution, packaging and marketing for supermarkets who produce their own products. Fortunately, through a combination of necessity and change of mentality, Spanish shoppers have gotten over their prejudices about house brands. Spaniards buy 20 percent more house brands now than they did in 2003, representing 44 percent of their grocery shopping, according to a study by Kantar for Spanish business daily Expansión. In some cases, the percentage is even higher: Lidl (82.1 percent), Mercadona (74.5 percent), Carrefour (40 percent), Día (57 percent). And according to their findings this shift isn't just about tightening one's belt because of the rising cost of living, although they admit that this has been the catalyst. Supermarkets in Spain have developed their own premium differentiation strategy - with different categories of house brands - which has broken the traditional monopoly of the big name brands. Now the marca blanca isn't 'the worst option' but the 'cheapest option', and this change of perception makes a difference. Unfortunately, the downside of improving house brand products - whether in reputation, appearance or actual quality - is that they've been getting more expensive. Then again, what hasn't?
Local Spain
a day ago
- Politics
- Local Spain
Barcelona ends 'friendship agreement' with Tel Aviv over Gaza war
The motion, supported by the governing Socialist party along with far-left and leftist pro-independence groups, calls for an end to all official relations with Israel "until respect for international law" and the "basic rights of the Palestinian people" are restored. Barcelona will also suspend a 1998 friendship agreement with Tel Aviv-Jaffa, and it urged the trade fair organiser Fira de Barcelona not to host Israeli government pavilions or companies involved in the arms trade or profiting from the conflict in Gaza. A similar recommendation was made to the Port of Barcelona. "The suffering and death in Gaza over the past year and a half, and recent attacks by the Israeli government, make any relationship unviable," Barcelona's Mayor Jaume Collboni said during the council session. It is not the first time Barcelona has moved to suspend ties with Israel. In 2023, then-mayor Ada Colau took similar steps, which were later reversed when Collboni won local elections. While the move has little practical impact, the decision by Spain's second-largest city -- a top tourist destination and home to one of the world's best-known football clubs -- adds to a growing list of critics of Israel's devastating war in Gaza. Barcelona's move comes a year after Spain, Ireland and Norway officially recognised a Palestinian state in a coordinated decision slammed by Israel. Spanish Prime Minister Pedro Sánchez is one of the most outspoken critics in the European Union of Israel's military operations in Gaza.
Local Spain
2 days ago
- Business
- Local Spain
Salaries close to the minimum wage are now the most common in Spain
Spain's Socialist-led coalition government has repeatedly increased the minimum wage since 2019. Most recently, back in February Spain's minimum wage or SMI (Salario Mínimo Interprofesional) was increased by €50 per month, up to €1,184 across 14 payments. This created some controversy as it means that many of these low-income workers will now earn enough to pay income tax (IRPF in Spanish) for the first time, as well as creating tension between the coalition partners in the Spanish government. Spain's leftist government has prioritised increasing the minimum wage and state benefits more widely, but new data now shows that this could have had consequences for the overall pay scales in the country. This is seemingly having an impact on wages in Spain, which have also grown but not been able to keep pace with the SMI. The consequence of this is that the minimum wage has in practice become, according to one Spanish outlet: 'the most common wage in Spain.' Sensationalist though that is, it's not entirely unfair. Let's unpick it. In 2018, the year before the current cycle of SMI rises began, the most frequent or commonly earned salary in Spain amounted to €18,469 gross per year. This was €8,200 less than the minimum wage at that time, when the SMI was just €10,303. Only five years later, these two salaries had practically aligned. According to the 2023 Wage Structure Survey, published by Spain's national stats institute INE, the most frequent full-time wage has fallen to €15,575 gross a year, just €450 more than the SMI. In other words, the minimum wage has gone from 56 percent of the most frequent wage to 97 percent in a period of just five years. It's also worth noting that Spain's average and median annual salaries are considerably higher: €28,050 gross and €23,349 gross respectively. The average is the sum of all salaries divided by the number of workers, while the median is the middle value in the ordered salary data set. Calculating the average is generally useful when data is normally distributed or free of outliers, while using the median is better when the data is skewed or contains outliers. In this case, given the huge salary disparities that can exist in Spain, the median salary - €23,349 gross per year - is a truer reflection of wages in Spain as at least half of the working population earnt this. But this doesn't change the fact that the most frequent salary in Spain in 2023 was €15,575 gross a year. Increasing the minimum wage has undoubtedly helped many Spaniards move away from lives of poverty, however if the minimum wage has been outpacing normal wages, it raises questions about pay in Spain more broadly. This is particularly worrying in the context of the cost of living and housing crises the country is currently experiencing.
Local Spain
2 days ago
- Business
- Local Spain
Is there a property bubble in Spain and will it burst in 2025?
A real estate or property bubble occurs when there is a steep rise in housing prices, fuelled by demand and speculation. Typically, it means that housing prices have risen more than current wages and that they're selling for much more than they actually should be worth. What makes it a bubble is that at some point in the future it will burst, leading to a sudden drop in housing prices, usually when demand falls and supply increases. So, is there a property bubble currently happening in Spain? It's common knowledge that housing prices in Spain have skyrocketed over the past few years and that there is a housing crisis with many people unable to access affordable homes. Home sales continue to break records in a market with a huge supply deficit. This is causing the average house price in Spain to reach bubble levels, the Bank of Spain noted in its latest financial report this week. Property prices are overvalued by up to 8.5 percent, El Banco de España concluded. It's worth noting that the monetary authority for Spain has the power to limit the number of mortgages banks can offer as a means to slow down any potential real estate bubble. Spain's central bank has also estimated that Spain's housing shortage added up to approximately 450,000 homes. They also revealed that during the second half of 2024, 367,000 purchases were made, which indicates high demand. The trend continued into early 2025 with 183,140 sales registered between January and March 2025, according to data published by Spain's National Statistics Institute (INE). This is the greatest number of sales in the beginning of the year since 2007 when Spain was definitely experiencing a property bubble. In fact, just one year later the bubble did burst and prices began to fall. Real estate experts believe that the trend seen at the beginning of 2025 is due to the current financial environment and 'the rush effect'. This is where people think that they should buy quickly before housing prices rise even further. "Prices are rising very quickly and the market is very tight ," José García Montalvo, professor of economics at Pompeu Fabra University, told Spain's leading newspaper El País. "This leads many people to think that if they wait any longer, they won't be able to buy, so they make the decision under the pressure that if they don't buy now, they won't be able to afford it in six months', he adds. María Matos, Director of Research at Fotocasa, believes that "if this trend of more than 60,000 transactions per month continues, we could be facing the best year since 2007'. For many analysts, these signs suggest that Spain is already experiencing a property bubble. What the experts are unsure of, however, is when it will burst, in part because not all of them even agree that there is a property bubble in the first place. One of the reasons that some analysts rule it out is the fact that the price per square metre in major Spanish cities is higher than at the height of the previous property bubble 17 years ago. They believe that one of the reasons prices are higher now than before is that buyers' salaries or purchasing power are also much higher, so real estate assets aren't overvalued. Furthermore, they've concluded that household debt is not at alarming levels, as it was during the 2007 property bubble. Some indicate that rising prices can be better explained by a lack of supply, than by a spiral of speculative buying. The President of the Association of Real Estate Agents of Biscay, José Manuel González Robles, rules out any risk of a real estate bubble. 'There's no risk, none, for a simple reason: the 2008 bubble and the financial crisis, was generated because the banks cut off the financing tap. There was over-indebtedness, especially at the state level.... Now the overall situation is completely different,' he told Basque newspaper Deia. Debt levels are low, and savings levels are at an all-time high. González explained that during Spain's financial crisis, there was a surplus of new-build housing, which now "doesn't exist". "Nothing is being built; on the contrary, there is a need for housing, and on the other hand, banks, back then, didn't want to give loans," which is the opposite now. Overall, there seems to be consensus that Spain's current housing crisis is very different from that of 2008. There's strong demand for housing, but construction is at a minimum (70 percent than back then). On the other hand, loans for housing developments and mortgages are much more closely supervised, and Spain no longer has cajas de ahorro savings banks, which were at the centre of previous crisis. Therefore, although there is clearly a severe housing crisis and shortage, the rude health of Spain's banking sector currently lessens the chances of a property bubble happening in 2025.
