In spite of the pressure on the euro and the general state of the Spanish economy, Mallorca has had a good year. All areas are reporting sales mainly at the upper end of the market which is underlined by the fact that the average sales price in Mallorca is reported as just under 1 million Euros.
The wide reaching network from Engel & Völkers has most certainly assisted with German speaking clients including Swiss and Austrians who account for over 50% of all sales and continue to dominate the market. This group is followed by British and Scandinavian buyers with some Spanish, French and Russians starting to come into the market.However, the single most important developing market on the island is from Scandinavia where 2012 visitor figures show increases of 20 – 25% from Norway, Denmark and Sweden assisted by better flight connections and the strength of their own economies and currencies.
Mallorca retains its reputation for offering quality properties in beautiful locations with average sale price from approximately 900,000€ in Mallorca South and approximately 1,000,000€ in Mallorca Central.
The market looks to remain stable and it’s still a buyer’s market predominately of cash buyers. Negotiation margins have come down to pre-crisis averages of 5-10% and properties in top locations can command their asking price. The average sales period varies from between 6 months for a really special or well priced property through to 12/18 months. Some properties this year have sold within 3 months but these are the exception.
New developments for Mallorca in 2013 include direct flight connections into Palma with Vueling from London Heathrow with a new daily service as of March. Norwegian Airlines will also start a new route out of London Gatwick, Germanwings has announced a new service from Hamburg and Finnair will launch a direct flight into Palma from Helsinki in June of this year. A new golf course is planned near Sencelles in Central Mallorca and the international hotel group Hyatt has announced plans to build a new luxury hotel in Cap Vermell on the north east coast.
Prices in 2013 look set to stay around the same level of 2012 and it will continue to be a buyer’s market. Strict regulations on building new property coupled with the fact that 40% of the island’s territory is protected, means a better balance of supply and demand on the island which is reflected in its property prices. It remains to be seen whether Mallorca attracts a flutter of more Russian or Chinese buyers when Spain’s new laws for non EU residents come into force this year.