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Mallorca Merit

14.05.22

The Mallorcan real estate market is once again proving itself to be an anchor of stability underpinning the economic development of the Balearic Islands and offering solid returns for investors with long-term investment goals in their sights. In 2021, Engel & Völkers Mallorca recorded the highest turnover performance in its 30-year history on the island, with sales transaction volume of 891 million euros.

“Residential real estate on the Balearics is a crisis-proof investment promising high returns. This is underpinned by the average year-on-year appreciation in value of the properties we have brokered of approximately nine percent since 2012,” says Florian Hofer, Managing Director of Engel & Völkers Balearic Islands; “This consistent rise in property prices results from the sustained level of demand among affluent Europeans who appreciate the appeal of Mallorca as a year-round destination and are increasingly placing importance on sustainability and eco technology when looking for property”.

The island’s ongoing transformation into a quality destination has seen Mallorca’s status as a prime Mediterranean location for luxury holiday and second homes.  According to AENA (Spanish Airports Authority), Palma de Mallorca Airport is the busiest in the Mediterranean with direct flights to 156 destinations all over Europe, and this year a new direct route to New York.  During the pandemic in particular, the Balearic Island was visited by clients from all over the world attracted by its excellent accessibility, its modern infrastructure, especially for remote working, and the quality Mediterranean lifestyle it offers.

Buyers from Northern and Central Europe have dominated the market for many years now and most Engel & Völkers’ clients come from Germany (66%, followed by the UK (9%), Spain (8%), Scandinavia (6%), Switzerland (4%), Austria (2%) and France (1%). Buyers in the premium segment appreciate the benefits of secluded living, the access to exclusive leisure and cultural activities, and the wide range of 17 international schools. “The pandemic has prompted many buyers to opt for a strategic re-location to enjoy all that Mallorca has to offer and work remotely from here. The trend towards more extended stays, or a complete move has become widespread among many wealthy families and business clients in the last two years.” says Hans Lenz, Managing Director of Engel & Völkers Mallorca Southwest.

The range of properties, combined with its rich cultural heritage and cosmopolitan flair, have made the island capital a real focal point for quality-conscious property buyers. In 2021, average asking prices for apartments in the historic Old Town and the nearby harbour area of Portixol levelled off at 800,000 euros and even higher prices were recorded for exceptional properties. Besides historic penthouses and apartments with terraces or balconies, buyer interest focuses primarily on new energy-efficient properties built to sustainable construction standards and with top-end interiors. The modernisation of the Club de Mar marina and development of environmentally friendly mobility concepts, Palma is set to become even more attractive as a residential location in the future.

Local sustainability initiatives aimed at strengthening the regional farming, agriculture sectors and tourism sectors are in alignment with Mallorca’s ambitions to establish itself as a pioneer for quality tourism and take a leading position in the Mediterranean as a residential and investment location. In view of the strong revenue performance and the boom in demand, the experts at Engel & Völkers are confident of further positive development over the course of the year. “The sustained rise in prices and the continued appreciation in value of Mallorcan properties over the last decade clearly prove that the Balearic Island is one of the world’s safest addresses with an incredible quality of life to offer,” Florian Hofer concludes.

www.engelvoelkers.com

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