Mainland investors buying unfinished apartment blocks

In the last few weeks work has restarted on around ten such projects, mainly in the Ciutadella area, as a result of investment from the mainland. Although purchase conditions vary in each case there is a common denominator; in every case the new investor has taken on the mortgage. In some instances the mainland investor has also bought out the original promoter; in others, a token amount has been paid in addition to assuming the mortgage.

These mainland investors undertake to complete the project using their own capital, in the majority of cases. There is speculation in the local construction sector that the new investors have diversifed their activities and have other interests outside the property market, including access to foreign capital.

The advantage of these projects being bought by new investors is that the economy is reactivated and, consequently, jobs are kept. Taking one of the projects in Camí Maó in Ciutadella as an example, it is calculated that around 25 jobs have been saved.

However, the future of these apartment blocks once they are finished is uncertain. In some cases the investors have already made arrangments with local estate agents to place the completed flats on the market, in others it has been decided, in view of the property market situation, to rent out the apartments in the short term and later decide whether to continue doing so or whether to sell the properties. There is concern in certain sectors of the island economy that some of the investors may speculate with their newly-acquired property, leaving the flats empty and unsold until their value has increased.

Whichever the case, all sectors agree that at least the unfinished blocks will be completed, the economy will be reactivated and the blocks will cease to be a blot on the landscape.