NYHETER

Increase of prices and the demand for luxury dwelling

02mar

Derecho Inmobiliario y cuestiones Fiscales

For some time we have been saying that the real estate market is changing. We are witness to the increase in prices and the demand existing now and even reaching very strange situations such as that of the estate agencies being without stock. This is one of the reasons leading to the selling prices that are continually rising. Engels & Volkers publicated on the 23rd February 2017 a detailed report concerning the increase of prices and the demand for luxury dwellings. This report has not gone unnoticed, and consequently, the Diario de Mallorca has not lost time in arousing interest. In this report, which we earnestly advise you read, is mentioned that the average value of prices has increased to 1.1M euros and that amongst the areas most searched for in the Island is that of the Bay of Formentor (prices that reach up to 6M euros), Port d’Andratx, Camp de Mar, Palma, Deiá, Valldemossa… The Diario de Mallorca points out some of the amounts that have been paid, such as for example, 7,9 M euros in Esporlas, 3,6 M  euros in Port d’Andratx and 2,7 M euros in the Port of Sóller; but these are only examples as there is no limit. We agree with Engels & Völkers that this is going to continue, and we are sure that next year the prices will even be higher. Mallorca is turning into a luxury destination and it is very true that in fact we are lucky to live on such a beautiful island. Proof of this are the words of the president of the association of promotors of the islands, Luís Martín who, according to the article in the Diario de Mallorca dated the 14th February this year, admitted that the promotors are only building «homes for the rich» Another determinant element in this increase is also the fact that properties are being purchased for investment and rent. We are witness to the amount of properties that are purchased to then be rented out. Our advice is to always assure that a license can be obtained in order to rent out to tourists, as we know for sure that the inspections are going to increase significantly in the future, due to the vast amount of flats and other dwellings that are on the market for their rental without any license. Additionally the fines will also become higher and higher. The legal insecurity arising due to the lack of agreement in this matter, together with the increase of sales of the properties, makes it even more necessary that a Law is urgently pronounced to help with the regulation of Holiday rentals. We see, on one side, that the Balearic legislative is also responding to the social demands that are arising due to the increase of prices and purchase of properties as investment, and we already have a draft of the Housing Law, that, amongst other things will control the «big dwelling holder», the administrator of buildings, the estate agent, etc., as well as the forming of a registry of unoccupied dwellings, the obligation of selling with a housing certificate, etc. For more information, you can find in this link our article concerning this. It is the social demand, sooner or later, that will manifest itself into a regulation, and as we are experts in Real Estate Law, of Construction and Planning it would be our pleasure to advise our Readers, clients and collaborators for any doubts that may arise, in order that our actions are always in accordance to the law.

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