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THE Balearic Association of House Valuers (ABAI) yesterday dismissed the claim that there will be a recession in house prices, in spite of the rise in interest rates and of the economic “crisis” which is affecting some countries in Europe. After the inauguration of the first Housing Fair in the Balearic Islands the President of ABAI, Carlos Oliva, demanded a modification to the Territory Law which would allow building in areas of the islands which “at the moment is forbidden” to guarantee the continuity of the construction and housing industry. The cost of housing will rise “progressively” in the Balearics in the next few years said Oliva.
He confirmed that construction companies and estate agents are experiencing the same levels of sales as in past years and with a similar rise in prices. However, this view is very different from the view of a study which this association presented this week, which says that the rise in house prices was around five percent in the last few years and talks about the “overvaluation” in the market. According to the President of the ABAI, new and second hand house prices are experiencing a growth “at the same level” all over Majorca, as the coastal areas are the areas where most foreigners prefer to buy houses. On the other hand, he said, the local market has no “potential” to buy in the coastal areas of the Balearics, where foreigners show more interest in buying semi detached houses and less in buying flats. In addition, the urban restrictions have stopped the “mad growth” which the Balearic coast has experienced in the last few years. This has made the prices rise, a factor which has also meant a rise in the quality of houses, he said. According to Oliva, foreigners come to Spain because it is “the country with the most reasonable house prices”, and because of this “the levels of sales are maintained” and prices rise. From his point of view, the housing markets in African and Asian countries cannot compete with the security and services which Spain offers.