**5. Discussion: Two Processes of International Gentrification Differentiated in the Final Phase of the Life Cycle Models**

The urban, tourist, and socio-demographic transformations described, in relation to recent years, manifest two differentiated urban-tourist dynamics, but leading, in both cases, to the development of gentrification processes.

This gentrification is based on an increase in the purchase and rental prices of the homes. This is what happens in the Santa Catalina-Canteras neighborhoods. In recent times, the district registered a continuous drop in purchase and sale prices from the beginning of the economic crisis in 2008 to the summer of 2014. As of the first quarter of 2016, a price escalation was set in motion, culminating in September 2019, when the highest average value per square meter was reached in the neighborhoods, that of 3104 Euros, well above the average value in the city, according to the real estate portal Idealista.com. This trend also occurred in the city as a whole, but the recent increase in prices was much more moderate (Figure 6).

**Figure 6.** Average price per m<sup>2</sup> in Euros of sales (2009–2019) in Las Palmas de Gran Canaria and Santa Catalina-Canteras. Source: Own elaboration from El Idealista.

These same trends can be seen in the evolution of rentals. The neighborhoods registered the most expensive average rent per m2 in the city, having reached their maximum value in 2018 (13.06 Euros). In 2018, the Paseo de Las Canteras, the waterfront avenue of Santa Catalina-Canteras, was the fifth most expensive average rental street in Spain, according to Tecnitasa [64].

The above trends are explained by several reasons. Firstly, the importance of the productive restructuring of the tourism sector, since it promotes the purchase of real estate for tourist rentals and new hotel products. Secondly, the purchase of real estate by international demand for vacation and productive purposes. The data of the Association of Registrars support this for the whole of the Canary Islands. In 2018, more than 31% of the purchase and sale operations in the islands were carried out by foreigners, especially the British, Germans, the French, Belgians, and Swedes. Finally, the early revaluation of investments and the environmental quality of the surroundings of Las Canteras beach has meant that local demand has grown in a large part of the area, although possibly more oriented towards business than for residential purposes.

The increase in real estate prices has its correlation in the increase of income levels of the resident population in the Santa Catalina-Canteras neighborhoods. Indeed, taking as a reference the data of the postal district of La Isleta-Puerto-Guanarteme, which coincides in statistics terms with the studied zone, the gross average income changed from 29,370 Euros, in 2013, to 31,261 Euros, in 2017 (Statistics of the Declarants of the Income Tax of the Physical Persons). This increase in income may be due in part to an improvement in the economic conditions of the resident population, but if we consider the evolution of income in other districts that have not had such a significant real estate expansion in the city, we can conclude that the growth in income is related to the construction of new homes and the increase in rents and sales prices.

However, the increases in income are more moderate than those recorded in real estate sales and rental prices. This informs us that tourism activity and international demand, which is not directly reflected in income values, are what sustain the prices of real estate in the neighborhoods and not so much the arrival of local people with more purchasing power to occupy the new properties or to replace residents with lower incomes. In other words, the 'expulsion' of residents who cannot pay their rents or who find it advantageous to sell or put their property up for tourist rental must be placed within the framework of a process of tourist gentrification that is fundamentally given by the development of rental for tourist use and international residential tourism.

In El Terreno, the real estate market was also very dynamic at the beginning of 2020. The number of houses for sale was important in all census sections, exceeding 200 in those located in the central (around Joan Miró street) and lower (promenade) parts of the neighborhoods. In all the sections, the sale prices were high, but in the part coinciding with the maritime façade, the highest sales means were registered. These two sections also led the rental offer of Section 07-040-02-007, bordering the heavily gentrified neighborhoods of Santa Catalina and Espanyolet, and had the highest prices, while Section 07-040-02-010 showed the lowest values. This area corresponds to the highest part of the city, in contact with Parc de Bellver and where the building model combines traditional single-family housing with low quality multi-family blocks (Table 4).


**Table 4.** Housing for sale and residential rent by census tract in El Terreno (13-03-2020). Source: Own elaboration from El Idealista.

Although El Terreno does not constitute a single zip code but is integrated into a larger territory (zip code 07014, son Dureta), the evolution of income provides us with some clues to the socio-urban transformations of the neighborhoods. The average gross income in 2017, the last data available, is among the highest in Palma, exceeding the municipal average by almost 17,000 Euros. Simultaneously, the differences between zip codes are

increasing, a symptom of the growing urban inequalities in this post-crisis stage. Between 2013 and 2017, the municipal average increased by about 4000 euros, while it did so by 11,000 euros in our study area. In Palma, the year-on-year percentage growth has been around 4% since 2014, and in Son Dureta it reached over 14% in 2016–2017 (Table 5).

**Table 5.** Evolution of average gross income indicators 2013–2017. Postal code 07014—Son Dureta. Source: Own elaboration based on statistics of personal income tax filers in the largest municipalities by zip code, Tax Office.


This spectacular increase in income, in a dynamic real estate market, shows that demographic contingents with greater purchasing power have chosen the neighborhood as their place of residence. If we bear in mind that in recent years, especially the population of community origin has grown, we can say that El Terreno is increasingly integrated into the international residential real estate market and that, consequently, a process of gentrification is taking place in which the new European Community inhabitants, especially Germans, Italians, the British, and the French, are gaining weight to the detriment of the population that had resided there until then, that is, the Spanish and foreigners of other nationalities.

Therefore, faced with the uncertain future of tourism in the neighborhood, an influential real estate sector is consolidating and producing a growing residentialization linked to a high-income level population, in many cases of European Community origin. The numerous offers of housing for rent and, above all, for sale, the high prices reached and the constantly increasing average income levels, are at the base of these processes.

In correspondence with a post-Fordist regime, of global capitalism and the model of flexible and digital accumulation [65], El Terreno and Santa Catalina-Canteras have evolved towards a new system of production and consumption of real estate and tourism, experiencing great transformations as a response to the global economic crisis of 2008 and as a strategy to adapt to new models of regulation. The system of production and consumption has in common, for both cases, its dependence on demand and international investment, but they follow different paths.

In El Terreno, the transformation is oriented towards residentialization, so from the point of view of the tourist life cycle model, it implies deepening its decline from its position as a mature destination, because of the restrictions on vacation housing imposed in the city of Palma (Law 6/2017 on Tourism in the Balearic Islands) and of the appearance of new real estate agents. These are listed real estate investment companies or investment "vulture" funds, which have only favored the international real estate market.

In Santa Catalina-Canteras, in Las Palmas de Gran Canaria, the transformation involves a commitment to the Peer-to-Peer Collaborative Economy, to residential or second home tourism and to new forms of coastal tourism. From the life cycle model, the neighborhood rejuvenates, but with the predominance of tourist and real estate accommodation far from the traditional tourist formulas.

In both cases, in these final stages of the life cycle model as tourist destinations, gentrification processes occur, which is also related to the revaluation phase in the life cycle model of the neighborhoods. In both cases, after a stage of ethnicization and loss of real estate value ("filtering"), increases in real estate value and social substitution are registered. Again, the internationalization of tourism and real estate activities are at the base of these processes, but in the case of Santa Catalina-Canteras, we are facing a process of tourism gentrification. In this regard, the gentrifying capacity of tourism has been

analyzed as the result of the increase of the tourist function within the residential urban space [2,33], considering that the tourism increase might occur under traditional forms of exploitation or through new modalities in the digital economy framework. This new context is removing from the offer many of the properties that were intended for permanent residential use, and this, in turn, implies processes of displacement and social elitization in the urban destinations.
