300 Average days of sunshine Mallorca enjoys each year

Your Spanish Isles?
Inward investment and celebrity endorsement means Mallorca’s property market is looking good. Are you ready to buy in The Balearics?
	By Shane Mcginley

A touch of Mallorcan magic obviously helped Michael Douglas. He was snapped courting Catherine Zeta-Jones on a yacht off the coast of this Balearic island in 1999, some months prior to their engagement. Now the couple have joined the likes of Andrew Lloyd Webber, Pierce Brosnan, Michael Schumacher, Abba’s Frida Lyngstad, Annie Lennox, Caroline Corr, The Edge from U2, Boris Becker, Richard Branson and Nigel Benn, as stars who, for at least some portion of the year, call Mallorca home.

With these superstars have come the super yachts. While there are already over 16,000 berths in Mallorca, there are plans to expand eight of the island’s 32 harbours and work has also started on a €40m project to enlarge Port Adriano. Worth over €1 billion, the marine tourist business increased by 15% last year. In fact, in a bid to attract mega cruise liners, Palma – the island’s capital, already ranked as the Med’s third most popular cruising destination – is set to build a new €23 million jetty.

Super yachts also need super homes, and there is no shortage of those in Mallorca. Over 54,000 EU citizens live on the island permanently and an estimated 60,000 own second homes. Figures from the June 2008 Kyero.com Spanish House Price Index show that the average price of a home in Spain is €240,000, while in Mallorca the average price is €495,000; only Barcelona’s real estate commands higher prices.

According to Jan Westwood, from The Property Finders, the reason Mallorca has kept its footing in the market is because the island did not see the same level oversupply and speculation that was witnessed in other Spanish areas. “At the top end of the Mallorcan market there is not enough property to go around. I have one client with a substantial budget looking for a large property in its own grounds, but there is nothing currently available which is suitable,” says Westwood. The differing fortunes are also evident in statistics from the Spanish Ministry of Housing which showed that last year while overall housing starts dropped by a third the number of planning approvals in the Balearics actually rose by 21%.

Not everything is rosy, however. Although prices are high the lower end of the market has been affected by the Spanish downturn. “The demand in Palma for starter homes has dropped off and promoters are not selling new developments as quickly as last year. These new buildings are low to mid quality apartments, mainly of interest to the Spanish and mainly on the periphery of the city,” reports Westwood. “Prices for new build and re-sale apartments in Mallorca are dropping a little and becoming more realistic. Examples of areas not performing well are the Palma suburbs and outlying areas such as Calas de Mallorca on the east coast as there is an oversupply of mid-low quality off plan apartments.”

Agents Engel & Völkers report that prices in Palma have been increasing by about 10- 16%, and last year the local authorities began knocking down old 1970 style buildings to restore the historic Old City. In central Palma properties sell quickly and in the suburbs Son Vida saw the biggest price jump last year. The most expensive area of Mallorca is the southwest region where the average price of a property is €1 million and the majority of buyers don’t even require financing. The district of Andratx is also particularly popular with second home buyers.

This entry was posted on Tuesday, July 1st, 2008 at 1:57 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.