Mallorca property

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Buy in Mallorca - Property Market in 2019

Mallorca Property Market 2019 – Strong Market, Limited Supply
Over the course of 2018 the market showed strong growth in both sales volume (+3.5%) and value (+7.0%), building on the excellent years of 2017 and 2016. The rate of growth, however, is showing signs of slowing. The INE (Spanish National Institute of Statistics) reported an increase of 7.0% in prices paid in the Balearics in 2018. This compares to an increase of 9.1% in 2017. For the first time in many years, the prices in the Balearics are not rising faster than the national average.
The supply / demand dynamic continues to shift since the bottom of the market in 2015, with demand exceeding supply in most sectors of the market. This is reflected by the “crane count” on the island as developers build new properties to meet the ever-increasing need for more housing.
There remains a high level of confidence amongst both international and domestic buyers.
According to INE data the total number of property sales during 2018 in the Balearics was 4,030 of which 34% were to international buyers, the same % as in 2017. Germans buyers continue to lead the way. British buyers are still the second largest group, although the numbers have reduced. Buyers from other northern European countries, primarily Sweden, Norway and Switzerland, continue to rise.

Indicators for 2019 are a little more mixed than the last few years, some are positive whilst others sound a note of caution, some of the key ones are listed below:
Strong Market
Mallorca offers a robust property market. When the market dips, property values drop less than the national average. When prices rise, Mallorca leads the recovery. Demand continues to be strong. Confidence amongst developers has seen an increase in the number of new building projects over the last year. Brexit has had little effect on the overall market as any reduction in British buyers has been met with an increase from other northern European countries.
Mortgages
The number of mortgages being offered by the banks continues to rise, with a 21% increase in 2018. Lower deposits and attractive interest rates, on average 2.6%, make a local mortgage a good option.
Property Rentals
Any property being offered for rental on a tourist basis, typically less than 30 days per rental, requires a tourist licence. Under the 2012 legislation it had not been possible to gain a licence for a residential apartment and as such rentals of privately-owned apartments were illegal across the Balearics. In August 2017 a new law was enacted which opens up the opportunity to gain a licence for any property type.
As the restrictions on property type have been lifted, new restrictions on location have been introduced. The ability to gain a licence now depends on where your property is located. For instance, in the city of Palma, no new licences will be granted.
If the ability to rent to holiday makers is part of your plans it is important to seek expert advice. Pinpoint Property Mallorca can provide guidance and put you in touch with legal professionals.
Residency
Residency for EU nationals is a simple process. We can put you in contact with professionals to help should this be in your plans.
For non-EU nationals, the Golden Visa program, offers residency upon investment of at least €500K in property. This offers buyers intending to live in Mallorca assurances that residency is not a hurdle.
For further information:
https://www.spanishpropertyinsight.com/legal/investor-guide-to-spain-golden-visa-law-residency-permits/
Brexit impact
Uncertainty over the impact of the final Brexit deal continues. This is clearly leading some British buyers to be cautious when considering major investments such as property abroad. Anticipation that the value of sterling will recover opposite the Euro in the future is leading some buyers to delay in making a purchasing decision.

Despite these factors, or maybe because of them, we believe that prices will continue to rise during 2019 although perhaps not at the rate of the last 2 years. The continued strong demand and confidence in Mallorca shown by international property investors are the main drivers for this.

PINPOINT PROPERTY CONCLUSIONS
With Mallorca´s popularity as a wonderful place to spend time and a sound investment choice, the island remains a very attractive proposition for potential buyers. With demand continuing to be high and the number of properties coming to the market slowing, the scope for significant reductions on asking price is much more limited than in previous years. That said there are still some opportunities for good deals depending on the market sector, the location, and the ability of buyers to move quickly.
The good news is that your new property on Mallorca will prove to be an excellent purchase as the market indicators remain positive for the future.
Should you be considering a property purchase on Mallorca, our excellent market knowledge, together with that of our agent partners, will ensure we can find the right property for you at the right price.

See our guide to Property Locations in Mallorca