Wondering About Majorca Property

By: Clint Jhonson

Several misleading reports are being blamed for hiding the true image of the Spanish property market; people wonder about what is really happening behind the surface when it comes to the mallorca immobilien. There were several alarming things that were written in recent articles claiming that the present property market is in a state of total collapse. But this is not the case with the Spanish property market. Actually, the event that has inspired all this gloomy information resides in a sort of share price correction that was made by the all the major Spanish companies that are quoted on the stock exchange. This fall when it comes to property share prices was overdue and even expected after a certain speculation that has managed to push up all the prices too far.

The press reporting has glossed over this experience; the stock market condition was given a misleading impression that the entire Spanish market was in great trouble. The majorca property was seen as subject to dangerous variations. This trouble when it came to the property market was no good news and the pessimism increased. The housing market was not regarded as a safe one anymore. But all this falling stock market does not signal the existence of the housing market crush. In fact, the Spanish reality states another thing; the property market's performance is not as bad as someone may have expected to be. The specialists are implying the fact that the real estate boom is quite over and the present market is likely to belong to the potential buyer. This market has transformed into a complex situation that mixes different markets that are performing in their own ways.

Over the last decade, the mallorca immobilien has consolidated its own position; the prices are high but the potential buyers are quite affluent. There is even a huge stock of different high-end properties that are waiting for the buyers to come. Enlightened thinking has marked the new urban projects that were used in Mallorca. This rare display of awareness has led to a new feature. New development was banned on this island until 2004 thus putting some necessary restraint when it comes to the supplies of new properties. Therefore, the entire existing market has cooled off its prices and these prices have become more realistic. All the buyers are likely to be better informed about the mallorca properties and even the vendors are likely to be more disposed when it comes to negotiate the transaction and its price.

Additionally, the number of the current transactions is quite down but the prices are really stable. The direct result of this policy is that the foreign demand remains steady and the prices are not likely to fall in the years to come. The island benefits from affluent and diversified European demand and this demand is able to reduce all the risks related to mallorca immobilien; the investment is thus ensured and the island proves itself to be a stable background that has low levels of recent constructions. Therefore, the conclusions are quite clear: the Spanish market has been depicted in the wrong manner. This market has not been melting down after the severe variations of house prices.

The past share price correction has not affected this market in a negative manner and the overall market is not likely to fall. On the contrary, some of its components will develop better than others and the existing stock market jolt will be able to help people focus on the serious imbalances that will affect the Spanish housing markets. The big risk will reside in over-provision because the Spanish developers will build too much houses. The offer will exceed the demand and the market will be overwhelmed; this oversupply is mainly due to low interest rates that are paid in Spain. The Spanish economy is highly dependant on the house building sector and the entire economy growth and even employment will depend on this market too.

The construction-lead recession is a possible consequence of this present state of facts and this unwanted consequence will mainly affect the constant demand for different holiday homes thus leading to house prices fall. This is the worst-case scenario that can occur on the Spanish property market but the specialists are fully aware that attractive properties will always be searched for when it comes to choosing desirable locations. The foreign appeal should also be taken into account because this type of appeal will hold the properties' value at the desired level. The prices will also recover as soon as the present economic conditions improve.

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