It isn't only luxury properties which are attracting foreign buyer interest.

27-02-2017

The association Palma XXI has presented findings from its first study of "gentrification in Palma", a key one being that by 2030 the foreign population of the city will have risen from the current 26% to 40%, the result of ever more foreign property purchasing. In certain parts of the city, such as Cala Major, El Terreno, Sant Agusti and Son Vida, the percentage will be higher - around 60%.

Gentrification is defined as the displacement of the local population by groups with greater wealth who are able to buy or rent properties. It is nothing new, says Marc Morell, one of those involved with the study. At present, though, Palma is in vogue as a weekend city-break destination, promoted as such by the likes of Airbnb, and as somewhere for northern Europeans to buy second homes.

The study indicates that the Balearics will continue to head the list of Spanish regions when it comes to the level of foreign property buying - 35 out of 100 buyers are foreign. Morell points out that it is not just the luxury sector that attracts foreign buyers. Only some five per cent of purchases in 2016 were for properties valued at half a million euros or more.

The president of Palma XXI, Jaume Garau, is warning that the city centre and areas such as El Molinar and Santa Catalina could end up becoming platforms for real-estate activity with people buying, selling and renting properties in a way that has happened in Venice and which has caused concerns in other cities.

The consequences for the local population are therefore clear. There will be higher prices and less access to property. In the Balearics in general, there was a 3.2% rise in property prices in January, whereas the national average was 1.1%. As for renting, Garau notes that the situation is "even more perverse", so much so that finding anywhere decent to rent will become more and more difficult.

The gentrification will also have an impact on local business. Garau gives an example of the Boquería market in Barcelona, which has been transformed into a market for tourists. The same is beginning to be the case with the Olivar and Santa Catalina markets. In addition, in areas where there are also cruise ship tourists, shops are being taken over by franchises and so the offer is all the same. If nothing is done, believe Palma XXI, in fifteen years time the city will not be same place it is now.

Faced by this issue of gentrification, the mayor says that a revision of Palma's general urban plan will present an opportunity to put in place housing policies that were abandoned by the Partido Popular. José Hila is stressing the need for empty properties to be made available for rent, while recognising the importance of tourism and for there to be a reconciliation between different needs.

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