RSS Feed AvailableMallorca Property market - 2008 PredictionsThe Mallorca real estate market seems to have weathered the global ‘cash crisis’ well so far. Mainland Spain has seen a steady decline in buyers from the heady heights of early 200. Of course, there are exceptions, as Polaris World in the Murcia region continues to sell well.
Unlike parts of mainland Spain, Mallorca has not suffered from an over-supply of speculative builds. As a consequence, demand, especially for quality apartments, is in balance with or exceeding supply. Coupled with the lack of good plots and restrictions on licences, prices for quality property in sought after locations are still likely to rise 7-10%, depending on area.
Quarterly statistics released by the Spanish Ministry of Housing bear out this trend. Furthermore, although housing starts throughout Spain had fallen generally by 33-37% in the 2nd quarter of 2007 (and by as much as 64% in Andalusia), planning approvals in the Balearics actually rose by 21% in the same period.
Beach front and Golf Front line property will remain an excellent investment, even more so if there is direct sea access, as coastal authorities are tightening up. They are not introducing new laws, simply implementing existing ones. Quality builds and properties in prime locations will continue to be in demand. Simply put, any property for sale in Mallorca with a prime view will always sell, and there will always be someone prepared to pay for the best.
The Ministry of Transport has allocated about half its annual budget to extend the rail network link from Palma via Inca and Manacor to Arta. Unlike Pollensa or Cala D’Or, which are popular with UK tour operators and villa rental companies, the north east of the island around Arta is not well known amongst UK buyers. Prices are still 10-15% cheaper than elsewhere, but not for long.
Lower priced properties will continue to find buyers, provided they remain at the lower level. Mallorca is an ‘aspirational’ buy and the lower priced properties will always be in demand. The middle priced Mallorcan property owners will need to be more patient than usual this year, and the higher priced luxury Mallorcan Villas will always find buyers.
Property in Mallorca is not cheap - the type of investors attracted to the island is driven mainly by lifestyle changes rather than for short term profit. Together with all the benefits of buying in Spain in general - short flight times from European destinations, an outdoor lifestyle, a safe child and family friendly culture - Mallorca offers that bit more. Mallorca seems to offer so much more than it’s immediate competitors.