Balearic Islands, the place to invest
The Balearic Islands were in 2016, the 2nd Autonomous Community In number of tourists received: 12,9 million, only surpassed by Catalonia. This data makes the region one of the best places to invest in Spain, not only because of the fast value growth but also because it is a tourism business centre which improves even more the yields.
Majorca is the biggest Island of the Balearic archipelago and a touristic destination chosen by many national and international tourists. Its Mediterranean climate brings to the island over 300 sunny days per year, which attracts people from all over the world.
The Majorcan market shows significant growth numbers and the scenario will remain positive in 2017, since the island has become a very interesting point of investment in real estate and touristic products.
The residential market in the Balearic Islands is prohibitive for most of the inhabitants.
The national average on how long a citizen takes to buy a home with their salary is 7,5 years, according to the Spanish valuation agency Sociedad de Tasación. In the case of the Balearic Islands a citizen takes an average of 15,8 years to be able to buy a home with their salary.
This data is extremely shocking, especially if we take into account that in other Autonomous Community like La Rioja, citizens take only 4,6 years to be able to buy a property.
Despite the relative high prices for inhabitants, thanks to the growing interest of foreign buyers there is still a very attractive value growth potential.
New build homes are a 3% more expensive in the Balearic Islands
Together with Catalonia and Madrid, the Balearic Islands region was amongst the regions with the mayor housing price increase in the past 12 months. Balearic property ended 2016 with an average m2 price of 1.875€/m2, almost 400€ over the country wide average
The prices of property in the second semester of 2016 have grown in the Balearic Islands with 1,6%, only behind Madrid (2,8%) and Barcelona (3,5%); according to the Spanish valuation agency: Sociedad de Tasacíon.
Balearic is also the community where second hand property has grown the most.
The Price of second hand property has grown a 6,36% in the area, even more than in the Canary Islands (5,69%) and Valencia (4,97%).
Balearic Islands would need to build 6.000 properties to satisfy the demand.
The lack of property is an issue in the islands. The demand exceeds the offer and the Ministry of Development has said that 6.000 properties would have to be built until 2018 to satisfy the vast demand. “The price of property will keep on increasing in the following years” said Luis Marti, president of the Balearic real estate association.
The net yield in Palma de Majorca in 2016 was around 6% for investors.
In 2016 property’s yield has grown again in the city and closed the year in a 6,3%. Buying a property and renting it in the city has given an average yield of 6,1%, compared to 5,8% in 2015.
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