Insights in Majorca’s booming real estate market
The Balearic islands have been an internationally popular travel destination and first and secondary residences for decades. Their popularity is unbroken. Most of these travellers are going to Majorca. Beautiful beaches and breathtaking nature facilitate, a relaxing stay and there’s always something new to discover. It’s no surprise that also in 2017, many buyers decided to purchase real estate on Majorca. In its current Majorca market report, Engel & Völkers gives insights to Majorca’s residential property market that is still worth investing in.
New areas experience an upturn
Residential properties were highly demanded in 2017, the number of sells on Majorca increased by about 20 percent. “The positive development increases the buyers’ confidence as they are investing in a continuously growing market”, says Florian Hofer, Managing Director of Engel & Völkers on the Balearics. The high demand faces an increasingly scarce offer of objects. This leads to an upturn of some areas on the island that haven’t been in the buyers’ focus so far. This is the case for the beach section Playa de Palma and the coastal town Cala Major.
Price increase in Majorca’s top locations
Majorca’s top locations in the premium segment include the southwest and Son Vida. Last year, the South West showed an average price increase that was higher than in any other of Majorca’s areas. Very exclusive properties in first sea line as well as penthouses make the most popular object types, especially in the new construction sector. Also new constructions are more preferred than old ones. Already in the 1980s, Puerto de Andratx was the “place to be”, this hasn’t changed until today. Whoever was looking to buy a villa here in 2017, paid an average price of 4.5 million euros. In Son Vida, no more building permits will be authorised in the future. As a result, rising real estate prices are to be expected. Son Vida is located close to Palma and is one of the most exclusive and popular areas of the island.
Also in the north of Mallorca there are some top properties. Especially in the region Formentor, where the average price for villas was 4.5 million euros in 2017. As properties directly by the sea are very rare, Engel & Völkers is observing a growing interest in more rural objects with a pool which are only 15 minutes by car from the coast.
43 percent of all transactions were made in Palma
Almost half of all transactions of Majorca’s residential real estate in 2017 was made in Palma de Mallorca. Exclusive townhouses experienced an average price increase to 3.8 million euros in 2017. But apartments are especially in demand. Freehold apartments with sea views on the coast between Portixol and Ciudad Jardín achieved an average price of 800,000 euros in 2017.
Showing a moderate price level still, the quarter El Terreno has a good investment potential.
The proximity to Palma also makes Puig de Ros and Cala Blava in Majorca’s south very popular. Villas in first sea line location achieved average prices of 1.9 million euros.
Majorca’s west has one of the highest price levels for residential properties in the premium segment and shows an average price for houses of 3.5 million euros. The top locations in the west are among others Deiá, Valldemossa and Puerto de Sóller.
Classic fincas stay in demand
What most people will have in mind first when hearing about Majorca, are probably classic fincas. They are promising authenticity, individuality and relaxation. Also in 2017 objects with a traditional Majorcan architectural style enjoyed great popularity. Average prices for fincas in Santanyí attract mostly German buyers and cost around 1.6 million euros. In Santa Maria and Alaró, that both belong to the island’s center, classic fincas with modern amenities count as the most sought-after types of property. Whereas buyers in Majorca’s north east are mostly looking for villas in proximity to the sea and fincas around Artà.
Outlook for Majorca’s real estate market in 2018
For 2018 it can be expected that the boom on Majorca’s real estate market will continue.
Majorca’s excellent infrastructure that offers great hospitals, schools and other education and care facilities, also enables a stay throughout the whole year. The deficiency of building licences in top locations is also a benefit for existing properties. Therefore their value increases. “We are expecting increasing prices for real estate especially in the premium sector”, says Florian Hofer.