BREXIT AND MALLORCA?
Brexit, an abbreviation for “British Exit”, is implying the June 23rd 2016, a referendum where British citizens chose to exit the European Union.
This was one of the most discussed events of 2016, as a result of which the resignation of British Prime Minister David Cameron took place, as he who was supporting the UK & EU partnership, and Home Secretary Theresa May became Prime Minister.
Not only Brexit stirred the global markets but caused the British pound to fall to its lowest point in decades. That’s why this has been a high concern for the business industry in Mallorca as well.
Despite all the worries and doubts, the Spanish real estate market has witnessed a significant boost in enquiries from the UK buyers, which meant not only that the British are still investing in properties, but that they are interested even more! The investment in real estate assets remains attractive and Spanish banks still offer competitive mortgages. Let’s not forget the fact, that the Mallorcan properties acquired by UK buyers are mostly second residences/holiday homes and are subjection to luxury instead of necessity, therefore the profile of these clients is of a high economic potential.
As a result of the Brexit and the increase of prices in Balearic Islands during last year, it seems that residents of United Kingdom choose to invest their money in a stable real estate market that offers perceivable guarantees such as Mallorca’s.
A property market like ours is solid and the increasing prices offer higher returns. Also Mallorca offers a modest tax policy for foreign investors, as it is fairly low compared to other regions of the European Union.
The holiday rental sector in 2017 is expected to continue to rise and the yearly investment return oscillates around 3% after the cost deduction.
Not only has Palma de Mallorca topped the Sunday Times’ list as the best place in the world to live, the island undoubtedly offers a solid infrastructure and advanced health system, high quality life style which is affordable and culturally rich at the same time.
Whether you prefer sea or mountains, contemporary or classic, white sand of virgin beaches or socializing in crowded places, Mallorca has it all. Iago Negueruela, the employment, trade and industry minister, expects the year to close with the Balearic economy having grown by 4.1% and anticipates that 2017 will record 3.7% growth. Therefore we do not believe that the UK referendum result has had or will have a negative impact, we continue to expect the British will keep on buying their holiday & investment homes as well as luxurious properties in Mallorca. After all Mallorca offers a great quality of life, making it the ideal destination and offering optimal investment opportunity.