Property search
Purchase Rent
View All

English, Home, Mallorca property

MALLORCA PROPERTY MARKET FORCAST FOR 2014

There is no doubt that as far as European second / holiday home property investment is concerned, the Mediterranean’s gem, Mallorca, certainly tops the list. Having recently been voted the second best place to reside in The World and thus stimulating the attention of investors, Mallorca’s real estate market has long risen out of the Spanish slump and 2014 is set to be a very buoyant year for business.

For pure lifestyle, the word is long out that the glittering island offers it all within the easy reach of a 2 – 2 1/2 hour flight. With 300 days of sunshine every year, 23 golf courses, 25 marinas, as well as some of the most stunning scenery in Europe, plenty of Europeans consider it a sound investment.

Whilst the real estate market in mainland Spain is still struggling to generate business, despite price reductions; in stark contrast, interest in Mallorca has gained enormous momentum. A lack of high-end stock means wealthy buyers are now chasing fewer properties.

Stuart Jenkins, the Sales Director at Balearic Properties, Mallorca’s leading Real Estate network has clear visions for 2014. Increased activity and optimism for Mallorca’s second home and residential market from the German, UK and Scandinavian markets in the second half of 2013 reflected what most people believed – as demand starts to outstrip supply, prices will inevitably increase; so now is the time to invest.

Further indications of the opportunities in the Mallorca Property Market have continued to appear recently in the press. This following article in the Sunday Times outlines the 2014 trend perfectly:

‘German investors are now buying back property in their favourite haunts, such as Mallorca, so what does this mean? Is now the time for smart British investors to follow German buyers back, at least in the preferred strongholds such as Mallorca? In prime areas such as Mallorca, the window of opportunity may shut sooner than people think. Vendors are still open to offers, and it’s far easier to negotiate with them just before prices starts rising than just after, but for the first time in 18 months, Agents are actively having to look for property, so the supply of properties priced to sell is getting tighter again.”

Stuart goes on to explain his view of the price situation:

Sale prices in Spain for quality properties in prime locations have neared the end of their fall according to several reports released in recent weeks. Indeed, the Ministry of Development reported that during Q3 2013, homes recorded their lowest drop since 2010 – even becoming more expensive in several regions – a trend that will continue into 2014.

2014 is most likely to see a increase of interest from foreign investors outside the EU from countries such as China, Russia and the Middle East eager to invest their money in Mallorca due to the ‘golden visa’ scheme introduced in January 2014. Mallorca has wisely always appreciated the benefit of foreign investment and strives to make property acquisition and legal procedures simple with practically no language skills required. For income tax the flat rate is 25% of the gross rental income and Capital Gains Tax is applied at 18% for E.U. non-residents and residents alike.

Balearic Properties believes that the post sales service is as important as the pre sales service, in particular for those buyers who wish to generate a good rental income from their newly acquired island home. The estate agents based in Pollensa provide the complete infrastructure to support the absent landlords with a complete property management service providing all needed key-holding, maintenance and security services.

Stuart definitely sees 2014 as a year for great opportunities, he continues: “now is probably as good as it will ever be. In my experience serious offers can still result in a reasonable reduction providing funds are in place and the buyer can move quickly – but this will not last as supply falls.”

There are no responses so far. Be the first to leave one →