• Residential property prices bottom out on the popular Balearic island
• Increase in business activities
Hamburg, 1 October 2010. Freehold apartments, finca properties and prestigious villas on Majorca the largest and most popular of the Balearic Islands are witnessing an increased level of demand once again. Many interested buyers have begun to see that the after-effects of the financial and economic crisis are drawing to an end and that any major drop in prices is now unlikely, said Daniel Chavarria Waschke, Spokesperson for Engel & Völkers Majorca, summing up the current trend on the island s market. Second home prices have fallen by between 15 and 30 percent since the outbreak of the crisis, although first-class properties in the very best locations were affected here to a lesser extent. The upcoming autumn holidays in many European countries will also lead to a further rise in the number of interested buyers, meaning that price rises will be back on the agenda again, Mr. Waschke added.
Engel & Völkers, one of the world s foremost brokers of real estate and yachts in the premium segment, is represented in Majorca with a total of 19 shops. We are registering increased activity and a growing interest in residential property on the island in almost all of our shops, said Waschke. Interested buyers, the majority of which come from the German-speaking world and Scandinavia, have been observing market trends very closely and are now ready to invest at the price low that has now been reached. Top-end villas, traditional fincas and penthouses are in particularly high demand, ideally located near to the coast with beautiful views. Homeowners reluctance to go any lower in price when selling their property is now meeting with increasing interest, Waschke revealed. It would appear that the market has bottomed out and that the foundations are now in place for an upturn to follow.
According to experts at Engel & Völkers, the overall market prices now reached have not been witnessed since six or seven years ago. Smaller properties such as two-bedroom apartments with sea views in the capital Palma, have reached particularly attractive valuations, changing hands for around 450,000 euros around 25 percent less than in 2007. First-class estates with sea views, for example in the Deia region along the mountainous west coast, have seen much lower drops in price however. A villa with four bedrooms and views in this region still reaches an average price of 2.75 million euros.
Prices in the north of Majorca have also dropped by around ten to 30 percent in recent years, thereby reaching a five-year low. But there is a turning point in sight here too, as the scarcity of development plots in the region had lead to a low level of new property construction that is impacting the market. Substantial parts of the north of Majorca are protected nature conservation areas, meaning that the supply can only be extended to a very limited extent by means of brand new buildings. The lack of supply, coupled with the current rise in demand, is resulting in a recovery of the market. In the southwest of the island, shops are seeing the best sales figures for the past three years, as prices had dropped significantly here too, which has since encouraged considerable interest from buyers.
Prices in the east of Majorca have remained comparatively stable over the last two years. The demand for property in the lower segment without sea views was very restrained however, while the interest in high-quality residences remained consistently high. Prices in the region would never have reached the same highs as e.g. the southeast of the island, however, which meant that they did not drop to the same extent either. A villa with four bedrooms and views is currently changing ownership for an average of approximately 1.7 million euros. The area around Costa de los Pinos is also emerging as a popular location. Traditionally highly sought-after amongst wealthy islanders, the region is now drawing increasing interest from German-speaking and Scandinavian investors.
Engel & Völkers is one of the world s leading service companies specialised in the sale and leasehold of premium residential property, commercial real estate and yachts. More than 400 residential property shops specialised in high-class real estate and 44 commercial offices brokering retail, office and industrial space, investment properties, multi-purpose apartment and office blocks and property portfolios offer both private and institutional clients a professionally tailored range of services. Engel & Völkers is currently operational in 37 countries on five continents.
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20355 Hamburg, Germany
Phone: +49 40 36 13 11 20
Fax: +49 40 36 13 11 02
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