BUCKING national trends, prices of new properties in Mallorca are set to rise. Palma will not be able to satisfy demand for new housing in 2010, Gabriel Oliver, President of the Balearics Property Developers Association warned.
Oliver said banks reticence to fund new construction projects since the recession, has created an “atypical” situation where supply is being outstripped by demand. Around 3,000 flats are sold in Mallorca annually, and at the end of 2011 there will only be a stock of 2,000 new properties on the island, Europa Press reports
By 2012, he said “there will be no stock, especially in the big cities like Palma” where there is a bigger demand due to the constant population growth.
He blames the Bank of Spain for the “unfair” situation in the Balearics as he feels the massive over-supply of housing stocks on the mainland has forced tighter constraints on all regions penalising investments in the construction industry. Meanwhile, he revealed 70 to 80 per cent of resale properties on the islands belong to banks.