The Balearic Islands are a part of Spain with the highest demand for property.

02-07-2017German G. Lama

CBRE, the American company which manages the largest real-estate investments in the world, has produced its 2018 report for Spain's residential property sector and forecasts that the average price of housing in the Balearics will have gone up ten per cent by the end of the year. In Spain as a whole, it predicts a six per cent rise and says that there is still room for more upward movement.

CBRE suggest that price increases are for now still moderate, but that they depend on local market conditions. Demand is intense in some parts of the country, but supply is "very limited", especially with regard to new housing. The company does not believe that price increases will mean a return to the situation which existed prior to the crash. "It is difficult to prove that there might be a bubble."

With regard to sales, CBRE expect fairly moderate growth this year. It forecasts 575,000 transactions, an increase of eight per cent. Given the lack of new housing, it is not surprising that 90% of sales in 2017 were for used homes. The national director for CBRE Spain, Samuel Población, notes that the building of new homes is "clearly insufficient".

The greatest demand for housing will be in metropolitan areas of large cities such as Barcelona, Madrid, Seville and Valencia as well as in regions with an established tourism sector, such as the Balearics.

On rental, CBRE show that 22% of all homes in 2016 were for rent. This contrasts with 19% in 2007, i.e. before the crash, and represents an increase of 880,000 additional homes. The upward trend in rental prices, which has been evident since the start of economic recovery, continued last year: the national average increase was 18%.

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LyndseyWallop / Hace over 3 years

It seems clear that most owners are not going to offer their properties for long term rental. However, from what I've seen in the last few months - whilst there has been an increase in the number of apartments going up for sale - somewhat surprisingly they are selling and holding their value. So, not sure what is being achieved....

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RogerTheButler / Hace over 3 years

Like marking your own homework. They would say that’.

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RBMM / Hace over 3 years

You can sell everything for the right price! If locals can't afford those prices and foreigners can't rent out their apartments the owners have to take the loss or sell their apartments to the price the market is willing to pay. It is very simple, but psychologically hard to accept. The market dictates the prices, like it or not. If I owned an apartment that I bought to rent out and can't rent it out today because I don't have a license, then I would reduce the price and invest in something that would give me a profit. You have to be flexible.

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Henry James / Hace over 3 years

I expect that a lot of those apartments that are now almost impossible to rent will be going up for sale, at prices that most locals can't afford so how does that solve the housing shortage.?

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