Mallorca Property Market Rising

Spain’s property market is back on track. According to leading Spanish property valuation firm, Tinsa, 2014 recorded the smallest nationwide house price devaluation since 2007 and, due to healthier supply-demand, record tourism figures, an improving economy and falling unemployment for the second consecutive year, it expects house price variation to level out at 0% this year.

Leading by example is the vintage island idyll of Mallorca, where traditional source investor markets are proving more secure with Germany posting record low unemployment and the fastest rate of economic growth in three years and UK recovery well on course. Since June 2014, the banks have also become more open to lending, albeit with strict criteria.

Port Andratx is still the most in-demand area for a luxury property, keeping previous favourites such as Portals Nous and Costa d’en Blanes in its shade. The result is that Port Andratx homes are commanding ever-higher prices. So much so that in December last year, El Mundo newspaper quoted a report which placed Port Andratx amongst the top 25 most exclusive residential neighbourhoods in the entire world. At number 19, and the only Spanish entrant to the list, the report said prices could reach as high as 27,000 euros per square metre. The most expensive home sold in Port Andratx last year went for 38 million euros. For HNW investors most buyer interest is for villas ranging between four and ten million euros alongside apartments in the 500,000 to 1.5 million euro bracket.

Hot on Port Andratx’s heels is the historic centre of capital city Palma, an area that is enjoying an incredible revival and spell in the global spotlight. Designer bars and fine dining restaurants are springing up throughout the cultural heart, while no less than 14 boutique hotels have opened in emblematic historic buildings over recent months. Clients are interested in particular in the renovated palaces that range in price from 600,000 euros up to 12 million or more. There is also great interest in country estates in the unspoilt centre of the Island.