Good news from the sunny shores of Mallorca where the real estate market did not suffer such a harsh decrease as on the Spanish mainland. Whereas in the southern and eastern parts of the Spanish peninsula prices dropped as much as 10% for property, in Mallorca prices didn’t lose more than 6%.
Now, experts in the real estate industry say that there are sunnier times coming to Mallorca island and that 2012 will definitely bring good news to homeowners who wish to sell or luxury property holders.
The main reason for optimism of the experts is the lack of funding for new construction projects which leads to higher demand that can’t be satisfied by the existing properties Mallorca. In more simple terms, because there was almost nothing built and the demand is still high, there will be more people fighting over the same number of homes next year, which will certainly drive prices up.
Gabriel Oliver, the head of the Balearics, Property Developers Association, was quoted as saying “There will be no stock, especially in the big cities like Palma”, since by the end of the year, there will only be around 2000 newly-built properties available to purchase.
By comparison, there is an average of 3000 transactions taking place in Mallorca every year, a fact which is why experts foretell that the prices will grow in the following months.
Some people don’t have such high expectations since from September 2010 to September of 2011, prices in the Balearics and the Canary islands have fallen close to 6%. While still better than the rest of the Spanish mainland property market, this decrease does not improve homeowners’ confidence in the market’s capability to make a quick recovery.