Property prices on Mallorca to rise again

Posted on March 2nd, 2012 in Real Estate in Spain by author

While the rest of Spain still bemoans the collapse of the property market, the Balearic Islands are a little ray of sunshine in an otherwise gloomy real estate sector. One industry expert even claimed that prices are bound to rise in the next 12 months.

Mr Gabriel Oliver, president of the Balearics Property Developers Association, recently spoke to Spanish newscasters Europa Press about the real estate sector and his ideas were picked up by Euro Weekly News.

Mr Oliver believes that the absence of finance for new real estate developments will have an effect on demand and supply. With fewer quality homes being built in the Balearics, demand will soon outstrip supply in the next 12 months. Palma in particular will suffer and overall only 2,000 new housing units will become available for investors and those seeking a second home this year.

Given that the annual average number of completed sales on Mallorca is normally nearer the 3,000 mark, Mr Oliver has a point. With such a shortage, prices for real estate on the island have to go up in line with demand.

Surprisingly perhaps, Mr Oliver’s optimism is not shaken by the fact that TINSA’s latest General IMIE Index figures showed a 6% drop in prices across the Balearic and the Canary Islands in September 2011 compared to the previous month.

The Balearic and the Canary Islands still outperformed the rest of Spain though, where prices have continued to drop by far more than on Mallorca.

SOURCE: www.propertyshowrooms.com

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