Sales on the rise in Mallorca and Ibiza

  • The german real estate company saw a 28% increase in Mallorca in 2014, with average sales value rising from 750,000 Euros in 2013 to 1.2M Euros in 2014
  • Engel & Völkers grows a 15% in Ibiza, where the excelent start of 2015 forecasts positively on expectationsfor upcoming months
  • German speaking countries are still one of the most important markets although we are seeing growing interest from British and Scandinavian clients

Elements_Dachterrasse-ventas-de-Engel-&-Völkers-se disparanEngel & Völkers Mallorca, is reporting total sales volume of 259M Euros up from 202M Euros in 2013 representing a 28% increase over the previous year. The trend for buyers to make decisions faster to buy continued as potential investors wanted to take advantage of the stable market and this sales movement has increased the average sales value from 750,000 Euros in 2013 to 1.2M Euros in 2014

Engel & Völkers Mallorca, is reporting total sales volume of 259M Euros up from 202M Euros in 2013 representing a 28% increase over the previous year. The trend for buyers to make decisions faster to buy continued as potential investors wanted to take advantage of the stable market and this sales movement has increased the average sales value from 750,000 Euros in 2013 to 1.2M Euros in 2014.

Hans Lenz, Managing Director, Engel & Völkers South West and spokesperson for E&V Mallorca says; “In Mallorca top end real estate has had another good year and a new segment of the luxury property market in the 5M Euro price range is developing in areas all over the island. Prior to 2007, a top luxury villa would have been priced at around the 2M Euro mark. However, in today’s market that price bracket has moved up to 5M Euros. This recent trend, which started in the south west, is now becoming more common place”.

Beneficial Tax Breaks

This year the Spanish Government has introduced a series of beneficial tax breaks for foreign investors; the capital gains rate will be reduced from 21% to 20% this year and to 19% in 2016. There’s a substantial reduction in Inheritance Tax from 34% to 1% and 7% for transactions to immediate family (spouse and children).

Pollensa-ventas-de-Engel-&-Völkers-se disparanGerman speaking buyers continue to dominate the market although the strengthening pound sterling against the Euro has brought in more British buyers. The Scandinavian market continues to develop and makes up approximately 20% of the market for E&V on Mallorca.

 Increased Lending by Spanish Banks.

There has been a notable shift by the Spanish Banks for foreign lenders and they are now offering mortgages with LTV up to 70% with fixed interest rates in the first year starting as low as 2.75 % changing to 1.85 – 2% of interest above the Euribor in the following years on a variable mortgage. This year the Euribor is currently at a record low of 0.32%.

Trends

The combination of a protected territory (40% of Mallorca’s territory is protected) with local authorities enforcing strict building regulations maintain a healthy level of supply and demand and consequently good plots are at a premium price. In recent years, investors have been buying up existing properties, particularly in prime seafront positions, only to knock them down and start again.

A major trend is the increased demand for cutting edge modern architecture and technology at the top end for bespoke villas in prime locations where the architecture and views are the main focus and the price tag becomes secondary.

German speaking buyers continue to dominate the market although the strengthening pound sterling against the Euro has brought in more British buyers. The Scandinavian market continues to develop and makes up approximately 20% of the market for E&V on Mallorca.

In Palma sales are on a par with 2013 rising by approximately 10% for the fashionable Portixol/Molinar areas just outside the Palma’s old town. Demand is focused on penthouses and apartments with outside space and views. Buyers continue to make decisions faster as they realise that property is not staying on the market as long.

E&V has seen a sales increase of 25% over 2013 in the exclusive residential area of Son Vida strategically located between Palma and the south west, developers are buying up prime plots for the construction of new villas from 2 – 12M Euros. In Son Vida the average sales value last year was 3M Euros.

In Mallorca's South West, where over 40% of all property sales are made on the island by E&V, there has been a property boom with sales totaling 125M Euros in 2014 representing a 43% increase over the previous year.

ventas-de-Engel-Völkers-se disparan-1Top prime areas around the world

In this region, the new premium property segment of 5M Euros plus has been the more active; prior to the 2007 boom properties of this value were rare. However, in the last two years there are more properties available of 5M Euros to meet increasing demand and on top of this; a new super prime level is developing of 10M plus Euros. Last summer the most expensive property sold in this area by E&V was valued at 18.5M Euros.

In 2014 a record square metre price of 27,000 Euros m2 was achieved by E&V for a sea front villa in Puerto Andratx and all sea frontline locations are in demand. The average sales value in the south west reflects this upturn and has increased from 1.36M Euros in 2013 to 1.9M Euros in 2014 representing a 27% increase over 2013.

Along In the West coast area investors continue to be attracted to some of the island’s most picturesque villages including Deia, Valldemossa and across the Sierra Tramuntana to the town of Soller, Puerto de Soller and Fornalutx. Here British buyers dominated the market and the average sales value increased to 1.27M Euros in 2014.

In the Centre and South of the island E&V is reporting more sales activity for properties and increased demand for plots. Prices are stable for sea frontline positions. Some non European investors from America, Canada and Australia have been encouraged by the Golden Visa and are spending from 500,000 – 2M Euros.

In the North sales activity has doubled with more renewed interest from British clients. Prices for apartments remain stable in this area with increases for quality rural properties. Last year the Alcudia and Bonaire areas were more popular and are only 40/45 minutes by car from Palma. Buyers are attracted to the great range of property in this region from a 2 bedroom apartment at 200.000 Euros to exclusive luxury villas in top locations at 15-20M Euros.

Along the coast to the North East sales activity has focused on the top end with demand in the 2 – 4M Euro bracket and there was more interest in good plots. Buyers here were mainly German speaking.

Down to the South East around Santanyi the demand focused on property from 500.000 Euros for a small villa or a well appointed apartment to 1-2M Euros for a villa with sea views or land. European buyers want a sea view whether it’s a villa or a rural property and more investors are looking for a rental investment.

Santa-Gertrudis-ventas-de-Engel-&-Völkers-se disparanHaving risen by 5 percent in 2013 at prime locations on the Balearic island, 2014 saw property prices rise by another 10 percent.

Ibiza

There appears to be no end in sight to Ibiza’s property market boom. Having risen by 5 percent in 2013 at prime locations on the Balearic island of Ibiza, 2014 saw property prices rise by another 10 percent. The number of sales transactions has also increased. Both Engel & Völkers Shops on Ibiza registered 15 percent more property sales in 2014 than in the previous year. This positive trend is set to continue in 2015. During the first weeks of the year, Engel & Völkers closed more sales than ever before in a first quarter over a total of 14 years operating on Ibiza. This is according to the “Ibiza Market Report 2015” published by Engel & Völkers.

Ibiza is a popular holiday destination amongst celebrities and a magnet for the wealthy international jet set. The Mediterranean island also attracts affluent property buyers from around the world as a result. Demand is also heightened by a flourishing tourism industry. In 2014, 13 percent more tourists holidayed on Ibiza than in the previous year. Ibiza’s intensive efforts to focus on quality and luxury tourism play a key role here. This includes a number of new 5-star hotels, world-class cuisine and entertainment, and a yacht marina that is set to turn Ibiza – alongside St. Tropez – into the leading marina in the Mediterranean for superyachts over 70 metres. This is boosting the island’s popularity as a refuge for Hollywood stars, top sporting personalities and business tycoons. Ibiza’s beautiful scenery, coupled with its myriad of recreational activities, is drawing both nature lovers seeking peace and quiet and modern cosmopolitans alike.

“It is above all the stability of the market and the superb quality of life that’s attracting house buyers,” said Florian Fischer, Managing Partner of Engel & Völkers on Ibiza. Clients looking to acquire a luxury property for a moderate price on Ibiza are too late. Substantial estates with high-end fittings and a premium location, like the region surrounding trendy Ibiza Town or the highly exclusive village Es Cubells in the south, are changing hands for seven-figure sums. And across the entire island, even 100 square metre apartments in average locations are now valued at a minimum of 280,000 euros.

Interest from outside Europe on the rise

The second home market is dominated by clients from German-speaking countries, followed by buyers from Benelux, the UK, Italy and France. Last year also saw a significant increase in buyer interest from farther afield, including the USA, Brazil and Mexico. The stabilisation of the economy on the Spanish mainland has also led to increased activity on the market from national buyers. 

ventas-de-Engel-Völkers-se disparan-2The second home market is dominated by clients from German-speaking countries, followed by buyers from Benelux, the UK, Italy and France.

 

Engel & Völkers forecasts that the property market on Ibiza will continue to see positive development for the rest of the year and that prices for premium estates in sought-after locations will rise further in the long term. “The high demand from abroad is centred on an increasingly limited supply of properties in the island’s best locations. That is bringing stability to the market, along with sustained value growth,” Florian Fischer added.

Elements_Vertikalgarten_Fassade-ventas-de-Engel-&-Völkers-se disparanEngel & Völkers forecasts that the property market on Ibiza will continue to see positive development for the rest of the year

Engel & Völkers

MMC Bogotá
Carrera 9 # 80 -15
Oficina 101 Bogotá
Colombia
Phone
+57-1-3001668

To the shop



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