Yes, the mid-range market on Mallorca is being squeezed by the global credit crisis – but high-end properties with high – end prices are still in demand.
In April this year, there was actually a slight increase in British buyers. It seems that they’ve ‘accepted’ the sterling-euro exchange situation for the moment and are not waiting to see – as they were back in January – if the pound will recover.”
The good news for Mallorca, however, is that it hasn’t had the uncontrolled over-building we’ve seen in recent years in areas of the mainland. Planning regulations are being implemented more strictly than ever before. And so the high-end market, as we’ve heard, still has demand exceeding supply, particularly when it comes to beach-front and frontline golf properties.
But when it comes to handing over hard cash, it’s in an economic downturn that the truth of the old property adage hits home: better to buy the worst house on a desirable road, than the best house on a less-desirable road. In other words, designer brands may be more expensive – but in the end, they’re better value!
It is easy to see why Mallorca is a favourite with overseas homebuyers.
The property market on the largest Balearic island is still booming with super rich buyers from France, Ireland, Russia, Sweden and Eastern European countries dominating the top end of the market. Most property professionals agree that business has been healthy, with steady requests for the two bed, two bath apartment, preferably with sea view. The top end of the market has been flying high with the best high end properties being snapped up before even making photograph stage, let alone to agency websites.
Agents report that business in 2007 was even better than in 2006 despite the US and European credit crunches and worries over Spain’s property market. Despite the anxiety surrounding other parts of Spain at the moment Mallorca is still a very safe investment. Property prices are pretty much guaranteed to remain steady due to the fact there is limited land available, a newly elected regional government in the Balearics has suggested it will limit building, so any existing properties on the island will be in high demand, but this simply makes Mallorca more exclusive, pushing up prices as supply falls further behind demand.
Spain’s pain has been Mallorca’s gain these past few years. Not only because wealthy international property-hunters who might previously have bought in ’the Costas’ have been diverting en masse to the jewel of the Balearics, but because the Mallorcan authorities have managed to steer the island away from the crass over-development that has scarred so much of southern Spain.
Tourism is Mallorca’s life-blood, but with 95% of holidaymakers concentrated in only 5% of its territory, up market tourists of the residential kind have plenty of room to spread their wings in less-developed areas of this elegant island. Meanwhile, massive current and future investment in Mallorca’s road, marina and golf infrastructure can only enhance the island’s status as one of Europe’s safest and most rewarding overseas-property destinations, where, in the past decade, average house prices have grown twice as fast as those on the mainland.
Catherine Zeta-Jones and Michael Douglas are well-known holiday-home owners on Mallorca, near neighbours include Andrew Lloyd Webber, PR guru Lynne Franks, Boris Becker, Claudia Schiffer, Michael Schumacher, The Norwegian and Spanish royal families to name but a few.
With super-rich buyers from France, Ireland, Russia and Sweden now homing in on a market traditionally dominated by Britons and Germans, Mallorca’s leading international agents are in expansive mood. Convinced that the momentum at the top end of the market is now ’unstoppable.’
Demand for designer properties defies downturn in Mallorca
The Mallorcan property market has been booming in recent years and is one of the healthiest in Europe. With strict building regulations in force to prevent over development, it is expected that prices will continue to rise and when taken into account with the buoyant holiday rental market on the island, Mallorcan property can be considered to be an excellent investment.
Buyers keen to escape the grey UK for a new life in sunny Mallorca are being urged to move quickly, following news that prices on the Balearic Islands have soared by a staggering 15.26% in the last 12 months, according to Spain´s largest newspaper, El Mundo.
Demand from all over Europe for properties on Mallorca has resulted in a limit to the new land available, pushing prices up.
