REAL
ESTATE
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.
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.
For more inFormation visit minkner.com
38 DELUXE
Mallorca’s
real estate market
records new highs
BY LUTZ MINKNER, CEO OF MINKNER & PARTNER