The latest report by BBVA Research on the real estate market in Spain shows that between January and September last year, the Balearic Islands ranked third in terms of property purchases by foreigners. The report says that a 9.8% increase in purchases was a relatively low rate, but it nevertheless had a high impact on the market. More than thirty per cent of homes were bought by foreigners. Only Tenerife and the province of Alicante registered more.
BBVA finds that the number of building applications in the Balearics exceeds the national average and that, together with Catalonia and Madrid, the Balearics continue to lead the recovery of house prices in Spain.
Although some uncertainty crept into the market towards the end of last year, mainly because of the situation in Catalonia, the overall trend was positive and is expected to continue in 2018. Prices are expected to rise on average by five per cent and sales nationwide are predicted to be around 550,000.
Housing investment, says BBVA, will be an economic area with the greatest growth in 2018. Despite the Catalonia crisis, low interest rates and greater growth of the European economy will boost foreign demand.
There continues, however, to be a high degree of geographical diversity in the market, with demand much higher in regions with strong tourism economies.
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