Inflation a key factor in causing a slowdown. | Gemma Andreu

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Forecasts by Atlas Real Estate Analytics point to a cooling-down of the Balearic property market in 2023 but a negligible fall in price.

The analysis suggests that 2022 will end with 17,616 sales, 15.6% more than are forecast for 2023 (14,868). The average price, meanwhile, will remain almost identical: from an average 2,583 euros per square metre in 2022 to 2,582 in 2023.

The forecasts take into consideration the effects that inflation and the consequent rise in construction costs will have on the market. The anticipated slowdown in the market will be the result of a cocktail of a fall in available stock, inflation, increase in the cost of materials and a rise in interest rates.

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Based on historical data, the analysis seeks to calibrate the real effects that inflation could have on the market. Unlike the financial crisis from 2008 - when low demand combined with high supply - the market will not be stressed due to strong variations but will instead experience "controlled slowdowns".