The Balearic Islands have recently benefited from the escape of capital due to high prices and the moratorium for new hotels in Madrid and Barcelona.

According to the data analysed, the real estate investment market in Spain will close 2018 financial year with figures similar to those obtained in 2017, 13,500 million, or slightly lower, and it will continue in expansion until 2020. In the same way, it is shown that Spain remains one of the most attractive countries for real estate investment and is the fifth European destination that captures the greatest volume of investment, on the list lead by the United Kingdom, Germany, France and the Netherlands. In this sense, investment funds are still the main players in the market, especially those of foreign origin.

The commercial sector in real estate is still the one with the highest volume of professional investment, reaching a total of 2,000 million euros.

Residential professional investment has evolved positively in the first half of the year and housing is still the preferred asset for both large funds and small investors, as 25% of operations have been made as investments.

The Balearic and Canary Islands are the preferred regions of the listed real estate investment company (socimi) that Bankinter will take to the stock market at the end of this year, as they have acquired 10 hotels in both archipelagos, what adds up more than 3,400 rooms. From a total of 23 hotels, 10 are on the islands: 5 in the Balearic Islands (4 in Mallorca and 1 in Menorca) and another 5 in the Canary Islands.

The idea is that these hotels allow to give back an annual dividend close to 5% to all the shareholders of the “socimi”, which will be quoted on the “MAB – Mercado Alternativo Bursátil” (Alternative Stock Market).

The main shareholders of Atom are Bankinter’s private banking clients, with a minimum investment of 200,000 euros and a maximum of 15% of their financial assets, but the bank itself, the manager of the “socimi”, GMA, and some institutional investors also take part in the capital.

This situation has contributed to the increase of private investment in construction. The increase in demand and promotion of housing, the latest impulse in the modernisation of hotels; and the industrial and commercial companies’ activity reactivation, have made the money that has been allocated from the private sector to building or refurbishing projects has increased an incredible 60.6% during the first four months of this year in relation to the same period of 2017.

Our foreign investment area offers legal assistance with regard to funds from other countries for investments in real estate and commercial Islands.
Our team has extensive international experience, we also have cooperation agreements with international firms.

 

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There is no doubt that investing in Mallorca’s real estate is a totally successful decision. Palma is the Spanish city where the investment in real estate is more productive, showing a price increase of 16% in the last quarter of 2017, compared to the same period in 2016.

A recent survey comparing prices of housing in Madrid, Barcelona, Málaga, Valencia and Palma, shows that Palma and Málaga overcome Madrid y Barcelona in terms of real estate profitability

The coastal segment of real estate is the most dynamic one because of the increasing interest of people with savings on buying properties to rent afterwards. The areas that are growing the most are still the ones with safer values.

The sale price in some areas like Palma and Calvià have reached historical highs. In the second quarter of this year the average price per square meter was 2,809 euros in Palma, and nearly 3,500 in Calviá. In both areas the prices have been increasing since late 2014, up to 50%. In the islands altogether, the prices have not yet reached its highest (that occurred in late 2008) although they are very close to it.

In relation to the final price of a property we have to take into account the high interest that foreigners have in investing in Mallorca . This demand has caused that the recovery of new constructions is mostly luxury homes. To this we have to add the increasing demand from residents, that once found a job again, are interested in buying a house. Real estate promoters and agents are aware that there is a much higher demand than existing supply, and therefore the high prices.

In the same way, the number of people thinking of buying a second house in the short term has increased eight points in 2018, comparing to 2017. 18% of the Spanish people are in the process of searching for this type of property, compared to 10% last year. 43% of these potential owners think about buying a property close to the sea and 17% in the town centre of a coastal municipality.

Mallorca in general and Palma specifically are living a new real estate boom and the transactions keep increasing, especially with foreign clients that see the island as a good place to invest in again.

At Ripoll & Mateu we work to bring total satisfaction to our customers effectively by offering legal services and personalised assistance.

For foreign investment, we offer legal assistance regarding funds from other countries for investment in real estate and business.

We offer detailed advice in the field of internationalisation by providing services such as:

  • International Trade Consulting, recruitment, setting up companies, subsidiaries and branches.
  • Advice on tax issues: tax incentives for the internationalisation of companies, income earned abroad, international operations, etc.
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Balearic Islands continue to experience strong economic growth in the second quarter of 2017, reaching 3.9%, and stringing eight consecutive quarters with GDP growth above 3.5%.

Balearics data exceed the state average in the second quarter, 3.1% according to the Institute of Statistics of the Balearic Islands, and are well above the 2.2% growth of the European Union in the same period. In terms of economic sectors, services continue to lead growth with 4% and accumulating 6 quarters with growth of 4% or more. Construction, on the other hand, accelerates activity to 3.7%. Visas projects have risen more than a fifth in the first half of 2017, this improvement is expected to be maintained in the immediate future.

The evolution of tourism is marked by very positive results. On the one hand, year-on-year spending increased 12.6% in July, and the number of tourists, a 5.3. In parallel, the number of passengers arriving at ports and airports of the islands increases strongly compared to last year’s figures and become overcome historical records.

The high profits of the tourism sector, have made the interest of the investors have multiplied when looking for its implantation in the island. Palma is among the five Spanish cities with greater pressure from large firms to find commercial premises. The demand for commercial premises or hotel facilities is much higher than the properties that are put up for sale or rent. The interest of companies and investors to take a hollow in the island goes beyond the premises in which to install a trade or a restaurant business and reaches full to the hotel plant.

 

Outside Palma, the most attractive areas for the investor are to be found in Port d’Andratx, Port Portals, Port de Pollença or Port d’Alcúdia, to name a few examples, due to strong foreign demand.

Palma is considered the main gateway for foreign investments in the Spanish tourism sector. From the legal point of view, the services that are most demanded are related to the mercantile, with the corporate law, the labor law, defense for procedures and assistance in investments. Customers are tourism professionals.

For foreign investment, we offer legal assistance regarding funds from other countries for investment in real estate and business.

Our team has extensive international experience and cooperation agreements with international firms. We are also members of the Association of International Property Professionals (AIPP).

This allows us to offer detailed advice in the field of internationalisation by providing services such as:

  • International Trade Consulting, recruitment, formation of companies, subsidiaries and branches.
  • Advice on tax issues: tax incentives for the internationalisation of companies, income earned abroad, international operations, etc.
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Balearic Islands is currently at the forefront of real estate market price leadership with a 7.2% increase between January and June, compared to the same period last year, according to data from the appraiser Tinsa.

The islands have benefited from the incipient recovery of national tourism but, above all, from the strong increase in the number of foreign visitors who, if maintained at the current pace, could reach 84.3 million visitors in the year, an 11,6% more than in 2016. This fact has encouraged the purchase of the rent, but also as a property of own use by many tourists.

We must emphasize that the evolution of housing prices in the Balearic Islands over the last decade has been much more favorable than the whole Spanish geography, because of its small volume of stock, which also would support the safety of properties in these areas as an investment.
It is a fact that foreign citizens are buying more houses than ever in the Balearic Islands. Last year reached a record high, with more than 53,000 sales, despite the decline of British buyers, French and German. The arrival of Swedish citizens has changed the landscape of buying and selling properties in Mallorca, climbing to the fourth position of home purchases by foreigners.

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To date, Balearic Islands, operate fifteen Swedish real estate. The Nordics offer a personal shopper service: they explain how they want the home and the professionals are looking for it in the real estate market available. 72% of contacts established with Swedish results in a purchase.

For foreign investment, we offer legal assistance regarding funds from other countries for investment in real estate and business. Our team has extensive international experience and cooperation agreements with international firms. We are also members of the Association of International Property Professionals (AIPP).

If you intend to purchase a property in Mallorca from a foreign country you should consider that both the jurisdiction and the processes to be carried out and the roles of professionals involved in it are different.

Throughout the whole process, the presence of a lawyer is essential to be responsible for providing obligatory advice to clients on legal, tax and legal liabilities acquired during the action of sale.

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Data from recent statistics cast the following conclusions: The average price of second-hand housing in the Balearic Islands has increased by 1.2% in May compared to the previous month, bringing the value to 2,108 Euros per square meter.

  • This figure is 25.5% above the average in Spain.
  • Balearics are the fourth most expensive autonomous region in Spain, only behind the Basque Country, Madrid and Catalonia.
  • The price of new housing in the Balearic Islands has risen 3.1 percent in the first quarter compared to the same period of the previous year.

Balearic Islands are in the spotlight of foreign investors looking to buy a property in the Islands. Last year, the volume of transactions by international buyers exceeded 1,600 million, which implies a 50% increase over the last two years. Luxury properties are the most sought after by European buyers, more interested in buying rather than renting, which has caused a significant increase of the average price so far this year in different areas of Mallorca.

Citizens of Scandinavian origin are playing a very active role in this situation. They have focused on Mallorca to acquire a holiday home, which reaffirms the trend detected by the registrars during the last months of 2016.

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Mallorca is popular among the Swedes, and the question is, why? Their fascination for the island is relatively recent and is based on various aspects: the weather, the strength of the Swedish currency (1 euro is equivalent to 9.6 crowns) and the shortage on the real estate industry in this Scandinavian country, which makes it almost impossible for its citizens to acquire a house. Factors that together have caused overwhelming buying and selling. Among the top areas in which the Scandinavians are acquiring properties, highlight goes to Palma center, the old town and various municipalities of Serra de Tramuntana.

Furthermore, there is a neighbourhood in the centre of Palma targeted by every Swedish who wants to invest in Mallorca: Santa Catalina, known as “little Sweden”.

If you are interested in buying a property in Mallorca please do not hesitate to contact Ripoll&Mateu Solicitors Mallorca.

We’re specialists in Real Estate Law in Mallorca and we offer comprehensive advice on the process of buying and selling property.

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Spain has positioned as a leader in holiday rental for the foreign tourist who realize short time trips outside their countries. For countries like Portugal, France, Italy, Germany and UK, Spain is the leader destination in holiday rentals.

According to the latest survey published by the Instituto Nacional de Estadística (INE), the tourists who stayed in hotels during last July were responsible for the 62.4% of total expenditure, while spent 9.2% less foreigners who stayed in holiday rental homes. In the case of UK, Spain brings one of every three booking requests overseas, putting it as the top destination ahead of others such as France or Italy. These latter, Italians, have increased their demand in the Balearic Islands by 85%.  The request of British citizens to holiday rental villas and apartments in Spain has increased by 75% respect 2015; being Mallorca the destination that has strongly grow in this type of offer.

These data, confirms that the known as “urban bubble” has come to Mallorca in hands of the holiday rental homes. It’s therefore very necessary to apply a legal regulation to the right use of the holiday rental because actually, the Balearic Administration has an outdated autonomic normative  that establish that are exclude from the holiday rental flats, terraced houses and apartments in multi-family buildings and that have forbidden to advertise them in any type of  with the words touristic or similars.

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In the same way, its expected  that the investment in hotels reaches to 1.300 million euros in the last months of 2016, according to the forecast that shuffles the Hotelier Report of Spain, where it is expected to occur among 2016 and 2017 a total of 64 opening of hotels, mainly four- and three-star. Of all these opnenings, 18 will be in Barcelona and 15 in Balearics, because the profitability of the hotels in Spain is very attractive to investors. For 2017, the forecast is yhat will be international funds and private investors specialized in hotels whose will invest in the hotel market. It is expected that the hotel investment will continue rising and focusing on added value because investors ensure that the tourist spending will continue increasing.

The Ripoll & Mateu Solicitors Mallorca foreign investment area offers legal assistance with regard to funds from other countries for investments in real estate and commercial in the Balearic Islands.
Our team has extensive international experience, we also have cooperation agreements with international firms and are members of the AIPP (Association of International Property Professionals).

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After the real estate crisis, the outlook for the real estate market has changed considerably, and one of the changes that has emerged in this new economic reality has been the opening of real estate investment to the general public with independence of their economic capacity.

Acting under the funding system known as crowdfunding or collaborative economy, the technology for contacting investors is used. Through an intermediary online platform, people interested finance real estate projects and receive a return for their rent, the proportional benefit when sale, or both.

Platform managers select and propose investment in a number of real estate assets