Brexit implications for the real estate market in the Balearic Islands
There are two main view points regarding the implications of Brexit for the real estate market in the Balearic Islands:
How will Brexit affect British citizens’ decision of buying in Spain? and How will Brexit affect British citizens that are already property owners in Spain?
The general idea is that Brexit will be more detrimental for the United Kingdom, in mostareas, including real estate. As investors flee the UK and look for alternatives in Europe, Spain shows up as a potential destination, for its proximity and adequate business system. Brexit could actually be an opportunity for the Spanish real estate market as even British companies (from all sectors, but especially the financial sector) have shown interest (oral ready done so) in moving their head quarters to Madrid because it is a point of financial geopolitical interest with a good quality of life which is very important too.
It may be that, following the Brexit vote the devaluation of the pound caused British citizensto lose purchasing power and be more cautious, and having the Balearic Islands on their top destinations for property purchasing, this would have a significant effect on the islands real estate market. However, even if the British buyers represent quite a significant number, the Balearic real estate sector is more diverse and not solely dependent on them. Thegrowing interest from other investors, like other North Europeans, Russians and Latin Americans for instance, reduces the possible impact Brexit might have on the Balearic real estate market.
The truth is that since the Brexit vote in 2016, even with the pound losing value, British citizens have been still visiting and investing in real estate in Spain and specifically in the Balearic Islands. Living or having a second/ holiday home in a country where there are more days of sun than in their own country, where they enjoy the culture, the gastronomy and feel welcome, is worth going through the changes that Brexit may bring. On top of that, the more up-market you go the less effect Brexit has. Well-off people are not going to let pension and health care issues prevent them from purchasing a house in a nearby paradise.
The recovery of the real estate sector has put Spain on the map again for luxury real estate; and which is one of the benchmark locations for luxury real estate investment? - The Balearic Islands.
British citizens that are already property owners, they will indeed have to worry about issues like healthcare, pensions, working permits, visas, possible additional property taxesetc. but it is also true that it is in everyone’s interests that Spain and the UK reach reciprocal agreements on these matters, like for example signing Double Tax Treaty Agreements
Even if in some cases British owners decide to sell their Spanish properties, there willsurely be buyers from other nationalities keeping up the demand in the market. Let it be EU or non-EU buyers, because after all, there are no specific requirements to be a national ofone of the EU countries in order to purchase property in Spain.
There is still quite a lot of uncertainty around what exactly will happen after Brexit, but what seems to be true is that the impact on the real estate market in Spain and more specifically in the Balearic Islands is way less significant than what could be expected.