Luxury real estate in Mallorca: increasing sales figures

For decades, the Spanish island of Mallorca has attracted tourists and ex-patriate residents seeking sunshine, hospitality and beautiful surroundings. From the bustling streets and elegant Cathedral of Palma de Mallorca, to the peaceful beaches around Cala Ratjada, the island is incredibly diverse, and has enchanted millions of visitors.

Luxury property in Mallorca

This diversity is reflected in the island’s changing property market. While in the past the island was famous for package holidays and large hotels, in the last few years sales of luxury properties in Mallorca have increased dramatically. Wealthy people from across the world have begun to see a great investment opportunity, as well as a superb place to spend time.

Mallorca – beating the trend

This trend has developed in stark contrast to the situation in mainland Spain, which jolts from one economic crisis to the next. Many of those seeking properties on the mainland have chosen to purchase in Mallorca, with its prosperous economy and large number of beautiful properties. Another attraction is the island’s Residency Law which allows non-EU buyers to obtain residency status if they make an investment of more than EUR 500,000. This saw property sales in Mallorca rise by 0.5 percent in 2013, while the trend for Spain as a whole continued to fall.

International interest in Mallorcan property has been consistently rising. Value for money has played a part in this. The island saw a drop in property prices from a 2007 peak until 2011, when prices began to rise gradually. According to the British newspaper The Telegraph last year saw a 4.8 percent rise in the price of luxury properties, but the market still represents excellent value for international buyers, particularly given the constant flow of tourists to the Balearic Islands.

A focus on luxury

Every year, over 9 million people pass through Palma de Mallorca airport, meaning that there is constant demand for holiday rentals. Prices have also been kept low by the large number of villas and homes that have been repossessed by Spanish banks and then sold on to new buyers. The island’s government has also made a conscious effort to focus on high end purchasers and not to compete with other Mediterranean destinations on cost alone. This has created excellent an environment to purchase luxury properties.

According to the market report of real estate agent Dahler & Company most buyers of luxury property in Mallorca come from Germany, but there are many British buyers as well. And the Residency Law has seen purchases by Russian customers dramatically increase, along with interest from Scandinavian buyers as well.

Real estate agents have reported that these customers are particularly attracted by two things – the famed Mallorcan coastline and closeness to exclusive golf courses. So resorts like Cala d’Or have blossomed, and up market properties have sold to global buyers, while down market resorts have struggled to sell apartments.

The Mallorcan property market took a battering during the economic crisis but, unlike the Spanish mainland, luxury buyers have returned. The island has tapped into a global demand for luxury and tranquillity, drawing on its culture and natural assets, and this looks set to continue.

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