Recent data from the Balearic Government confirm that the economy of the islands grew by 4.1% in 2016, the highest growth in the last 16 years. There were increases in all quarters, highlighting the good behavior in tourism in seasons in which traditionally presents less activity.

In the same report, the Government believes that the ‘Brexit’ will have little impact on the Balearic Islands during this year, following the same line of what happened in 2016 since the process is still in a negotiating moment.

It’s expected that the Mallorcan economy will not be unduly prejudiced in the short term by the UK decision to leave the European Union, despite receiving more than three million British tourists a year and has a population of almost 20 000 residents.

The Balearic economy is in a bullish process

Balearics is experiencing exceptional tourist seasons thanks to the quality of its services and the collateral consequences of the difficult situation being experienced by other countries that in the past were direct competitors in this sector.

Following in the line of these data, it’s to emphasize that in January Balearics received a total of 107,087 foreign tourists. A figure that translates to the arrival of almost 5% more tourists than in January 2016. According to INE data, Germany remains the main emitting country of the Islands, with 46.4% of tourists; Followed by the United Kingdom, which sent to the Balearic Islands 10.4% of visitors.

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The Balearic Islands will continue to grow in 2017, with a forecast of 3.6% after two years of growth. The Government expects that 2017 will also be one of the highest values recorded in the last 16 years, close to the results of 2016, and will represent an accumulation of growth of 11% in the last three years.

The forecast for 2017 places the Balearic Islands in a process of “normalization” of the growth cycle.

Growth is expected between 3.2% and 3.7% in all Islands. By sectors, the gross value added shows positive increases in all activities: the service sector is the one that grows the most, 3.8%.

Another significant finding is that the number of home mortgages increased by 14% in 2016 over the previous year, to 281,328, thus earning its third consecutive annual increase after seven years of declines.

With these very positive conditions, we can consider that it is a good time to invest in the Balearics, especially in Mallorca.

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Much has been said in the last weeks of the consequences of Brexit for the property market in Mallorca and Spain. Since the referendum held last June, the pound has dropped more than 10% in value. Because of this, several investment funds in the Balearic property sector suspended trading before the rain redemption orders.

So, the situation doesn’t seem beneficial for the real estate sector in England, however, this situation has a positive impact in the short to medium term real estate in Spain.
The impact of Brexit has meant the loss of value of sterling by about 10% against the euro. This implies a loss of purchasing power for buyers; despite this, the Balearic Islands are one of the main destinations for British investment. The current situation is beneficial for them and are interested in investing for reasons of proximity, connections, climate and quality of life.

Real estate sales have increased by 79% in the first half of the year. The price has increased in some cases up to 59% and in some areas of the island is taking the case that the supply is unable to meet demand. The real estate market has emerged mainly in the investment side and in relation to British investors are expected to increase their investments in our country, as high interest remains in the residential. The Spanish property market offers great opportunities and high returns for the British and the Balearic Islands are presented as an attractive investment in the medium and long term.

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After all the foregoing arises a positive impact of the Brexit on the Spanish real estate market, in fact many non-EU buyers have already begun to look for alternative places to London that offer good investment potential. The number of British citizens seeking to move abroad has increased by 30% and Mallorca is at the top of their searches.

Buying a property in a foreign country can be a complicated affair and fraught with formalities and obligations that the purchaser might be completely unaware of until it is possibly too late. Ripoll Mateu Solicitors Mallorca understand that the process of buying a property in Spain differs from that in the UK. We can advise you on all matters relating to the purchase of your property, for foreign investment, we offer legal assistance regarding funds from other countries for investment in real estate and business.

We specialise in Real Estate Law and legal and tax advice in the process of buying and selling a property in Mallorca, contact us for your request.

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