The Balearics continue to be the most popular region for foreign property investors in Spain which has witnessed an overall decline in sales according to the Property Registrars.
During the third quarter of the year, the percentage of homes purchased by foreigners was 31.93%, one point higher than in the previous quarter.
This places the Balearics as the leading community in these purchases, although the provincial statistics indicate that the provinces of Alicante, Malaga and Santa Cruz de Tenerife still have higher percentages than those of the islands, to the point that in Alicante the percentage reaches 43.61%.
In relative terms, that is to say, in percentage, the purchase of property by foreigners remains more or less at the same levels as in recent years, between 30 and 34%, but in absolute terms, foreigners are also buying less.
The report by the Association of Registrars clearly points out that the decline in house sales is becoming more and more pronounced and in the Balearics it has been almost 10 % in the third quarter of the year. The decline has been equal in purchases by residents and foreigners alike: the percentage of foreign purchases has remained almost the same.
Up to October this year, a total of 3,337 property transactions were carried out on the islands, a fall of 9.5 % in this quarter.
However, when compared to last year’s results, i.e. October 2022 and 2023, the drop is actually a plunge, with a fall of 17.6 %, the largest ever in Spain.
This collapse in real estate transactions is due to two essential factors. On the one hand, there is the price of housing, which in the Balearics broke a new record of 3,388 euros per square metre. The second factor is the increase in interest rates.
Banks are no longer easily granting loans due to the rise in interest rates and this is making access to housing more difficult and reducing purchases.
In fact, the Balearics is the region where the granting of loans for the purchase of housing has fallen the most.
Mortgage lending fell in the third quarter by 13.66%. In Spain, mortgage loans remained at the same levels as in the previous quarter, with no decline, as in the Islands.