Mallorca’s real estate market records new highs
Mallorca is once again on everyone’s lips. German magazine STERN even dedicated a special edition to the Island. Last year twelve million tourists visited the Balearics, and this number is expected to rise in 2017 because of ongoing security risks in the popular holiday destinations of North Africa and Turkey. By Lutz Minkner, CEO of Minkner & Partner.
Some visitors develop such a deep affection for these beautiful islands that they look for a holiday home or permanent residence here. No surprise then that the local property market is booming, particularly in Mallorca. The real estate crisis has long been overcome. Since 2013, there has been growing demand for high-quality properties with the result that prices are rising and what was previously a buyer’s market has now become a seller’s market. This means that in most segments of the market demand from international buyers is greater than what is on offer. Bargain hunters are in mourning and the room for negotiation is getting smaller. This description of the market is underpinned by figures published by the Spanish Institute for Statistics based on data supplied by notaries.
Last year in the Balearics some 12,200 properties changed hands, approximately 30% more than in 2015. The volume of these sales was 3.5 billion euros. As Spain has the highest ownership rate in Europe with 85%,
the majority of these sales were to Spanish buyers. However, the proportion of foreign buyers is considerable: every third property in the Balearics was sold to a foreign buyer. In fact, this figure is likely to be even higher, as when a foreign buyer uses the services of a Spanish company, the purchase is entered into the statistics as a purchase by a resident. Foreign buyers still have a much larger share of the total purchase volume, as the value of the real estate they buy is significantly higher than the average value of property purchased by Spanish buyers.
According to data from notaries in the Balearic Islands, the value of property purchased by foreign buyers amounted to 1.5 billion euros. Buyers come from Germany (36%), Great Britain (19%) and Sweden (6%). The justification purchasers give for their decision to buy in Mallorca is that the economy in their own countries is running smoothly and they are looking for secure places to invest as they can no longer generate any income from their capital at home. Properties in Mallorca are seen as a secure investment, which in addition to holding and appreciating their value also provide an emotional return in terms of “quality of life”. Added to this are safety, the guarantee of 300 days of sunshine a year, good infrastructure, an attractive range of leisure pursuits, a wide choice of restaurants, excellent flight connections, not forgetting the diversity and beauty of the Island.
The only downside to this scenario is the rise in real estate prices, which is anticipated to average 7% for 2017. Experts predict further price increases, as although entry prices are high they are still moderate compared to other top international destinations, so that even taking into account rising prices, it is generally assumed that values will hold. Translation: Celia Moody
For more information about Mallorca, go to www.deluxemallorca.com. Properties as seen at www.minkner.com.