IBAVI Mortgage Guarantee Programme

The project

Access to housing has become a widespread problem in the Balearic Islands. The COVID 19 crisis and the subsequent war in Ukraine have negatively impacted the economy, and made access to housing increasingly difficult. On the one hand, the surge in demand for housing coupled with a lack of supply has driven prices to the levels of the 2008 housing bubble. This has made the Balearic Islands the most expensive region in Spain in which to buy a property.

And on the other, rising inflation over the last year has reduced household purchasing power, and so also the ability to save, consequently making access to mortgages more difficult, even for middle-income households. Moreover, the Euribor is at its highest level in the last decade, which means that monthly mortgage repayments more expensive and financial institutions more stringent when it comes to demanding financial solvency.

With this project, the Balearic Housing Institute (IBAVI) aims to facilitate access to home ownership. Through a line of guarantees, it will temporarily finance up to 20% of the maximum value of protected properties, and up to 15% of the appraised value if free, through collaboration agreements with participating financial institutions. Fifteen million euros will be earmarked for the alleviation of the difficulties in access to housing for families on the islands.

To be able to access these guarantee funds, applicants will need to fulfil a series of requirements, such as having been resident in the Balearic Islands for the last 5 years, not being owners or usufructuaries of any other property and acquiring a property in the Balearic Islands for a price equal to or less than €242,112.60 if it is located in Mallorca or Menorca, and €270,151.20 if located in Ibiza or Formentera.