14 Sep 2020
Tags: Mallorca real estate, Majorca Real Estate, Engel & Völkers Mallorca, Country House, seaside villas, Apartments, real estate Mallorca, real estate market Mallorca, Townhouses, rental property Mallorca, real estate market Majorca
- European buyers maintain demand during & after lockdown
- Buyers' search criteria have changed as a result of coronavirus
The Balearic Island of Mallorca continues to demonstrate its reputation as a safe haven for real estate. Since the island was reopened to international visitors in July 2020, buyers, especially German-speaking, have maintained high demand. During the period from January to July 2020, Engel & Völkers Mallorca achieved a sales transaction volume of 217 million euros despite the strict legal restrictions in place.
“There is a positive development in the property market. Prices have not fallen over the past few months, and sales figures have also remained stable,” says Florian Hofer, Managing Director of Engel & Völkers on the Balearics, adding: Between January and July 2020, the average sales price levelled off at approximately 1.5 million euros. This underlines the resilience of the Mallorcan market in the face of the coronavirus pandemic, as well as the high level of interest among international buyers. Dynamic market activity is ensuring steady prices and giving real estate owners and investors a sense of reassurance and security.”
Steady demand for properties to buy and let: International buyers, as well as capital investors, are driving market development
According to the Spanish Ministry of Development (Ministerio de Fomento), foreign buyers accounted for approximately 40% of all sales transaction volume in the Balearics from 2012 to 2019. Even during and after the lockdown phase, international buyers and investors were particularly active in Mallorca. The largest proportion of clients are from Germany, Austria and Switzerland, followed by the UK and France. Buyers from Scandinavia, North and South America are also showing an increased interest in Mallorcan real estate.
In some areas, such as the southeast of the island, Engel & Völkers registered an impressive 110% increase in client enquiries in June 2020, while in July 2020 the number of enquiries regarding luxury properties here increased by 150% compared to the same period in the previous year. In the exclusive residential district of Son Vida, as well as in the central and southern regions of Mallorca, the number of client enquiries in June and July doubled compared to the same period in the previous year.
During high season in July 2020, Engel & Völkers Mallorca recorded an average daily real estate transaction of between 300,000 and 12.9 million euros. The southwest of the island in particular witnessed a rise in sales activities for properties in the double-digit millions. During the same period, growing numbers of German, British and Scandinavian buyers invested in real estate with price categories ranging from 2 to 8 million euros in Son Vida and the outskirts of Palma. In addition, Engel & Völkers recorded increased growth in its rental business during the summer months, with rising demand for villas and apartments for long-term rental.
“Clients are often signing rental contracts for 12 or 24 months with an option to extend. They want to get to know the island and the different locations better before they decide to purchase a property,” says Florian Hofer.
Virtual property viewings: support real estate transactions
Especially in turbulent times, Mallorca's excellent infrastructure, modern healthcare system and high standard of living, make it a favourite location for both first and second homes. Many international buyers and investors were forced to wait for the island to reopen before finally being able to make a personal viewing. During the lockdown, the 18 Engel & Völkers shops on the island enabled potential buyers to “view” properties virtually as part of a live video tour.
“With social distancing regulations imposed, virtual viewings proved to be a practical tool when brokering real estate, enabling the client to gain an initial impression of the architecture and spatial distribution of the property in the first phase of viewing,” says Hans Lenz, Managing Director of Engel & Völkers Mallorca Southwest. The feedback has been positive from both buyers and vendors. From June to July 2020, Engel & Völkers registered 14,000 virtual viewings on Mallorca.
In July alone, Engel & Völkers Mallorca reported real estate transaction volume of 49 million euros that marked an increase of around 75% compared to the same month in the previous year. “Many of our clients couldn't wait to finally view the property they have had their sights on and were then quick to make a decision to sign the contract. It also underlines the fact that international buyers regard Mallorca as a safe haven for properties in the premium segment,” says Florian Hofer.
Changing priorities: Clients increasingly seek security, fast broadband connection, privacy and sustainability
As well as being a fabulous destination of those drawn to the landscape of the Mediterranean, Mallorca is also an oasis for a discerning international clientele seeking relaxation, comfort and discretion all year round with fast broadband connectivity offering the possibility to work from their island home if necessary.
“During the last few months, there has been strong demand for properties on large plots in secluded locations, which are also conveniently close to local stores, medical facilities, and international schools. “Country estates and houses in the north of the island overlooking the Sierra de Tramuntana Mountains have been particularly sought-after,” says Gary Hobson, Managing Director of Engel & Völkers Mallorca North.
“The appeal of a luxury refuge on Mallorca lies in the mix of traditional Mediterranean and modern architecture, the premium-quality construction, and first-rate amenities that enable remote working from the island. Home offices, gyms, cinemas, swimming pools and spa and sauna facilities are also among the search criteria of many clients in the high-end segment,” says Hans Lenz, Managing Director of Engel & Völkers Mallorca Southwest.
Depending on the region, clients are also drawn to urban apartments overlooking the historic Old Town in Palma de Mallorca and new-build villas with private access to the beach and panoramic views of the mountains and the sea. “Top properties in the two-digit millions sometimes also have their own helipad,” says Gabriela Muñoz, Managing Director of Engel & Völkers Palma Son Vida.
In the southeast, the northeast and centre of the island, there has been increased interest – alongside the high demand for rural houses – traditional townhouses with contemporary interiors. Prices for this type of property range from 700,000 to over 1 million euros. “In the search for a property, the living concept of self-sufficient buildings with their own supply of power and water will also play a greater role in the future. All newly built country houses must adhere to ecological and energy-friendly standards,” says Christina Deutsch, Managing Director of Engel & Völkers Mallorca Central and South.
Outlook: stable price development and long-term investment potential
The real estate and construction sector makes up more than a fifth of the total GDP of the Balearic Region, making it an essential sector to help stabilise the local economy and provide thousands of jobs. For buyers and investors with long-term investment plans, Mallorca remains one of the most attractive locations in the Mediterranean. “We envisage continued demand for authentic country estates, contemporary new-build villas as well as high-end apartments during the coming autumn and winter months,” Florian Hofer adds.
What's on the market?
Exclusive: Loveshack 11, a new stunning contemporary villa in Port Andratx with inspiring sea views. 11.45 million euros
Pictures: https://www.dropbox.com/sh/j64rajd83wbsryy/AAByQTN2gWvlyUAVXObnO66ea?dl=0
New on the market - a contemporary house in the traditional Mallorcan country house style in the romantic village of Deia. Set in the heart of the Sierra Tramuntana with spectacular views. 3.5 million euros
Pictures:
https://www.dropbox.com/sh/gswj9g254vc4iaa/AABPcaCGc1M6J8dByr-pEAUva?dl=0
Modern Bauhaus-style hilltop villa at Cap Vermell with fantastic sea views and minutes' walk from the beach (northeast). 1.59 million euros
Pictures:
https://www.dropbox.com/sh/6m8xdm9jvlru5i2/AAALTYHAcmgdQ-V913WIJXm-a?dl=0
Trending: a stylish restoration of a traditional townhouse in Santanyi (southeast) with a pool. 1.45 million euros
Pictures: https://www.dropbox.com/sh/fp254h8evojlmqh/AADw6wmfa5qaYMDFSbAEdsYua?dl=0
Traditional country house near Santa Eugenia (central) with pool & views. 750,000 euros
https://www.engelvoelkers.com/en-es/property/rural-house-close-to-santa-eugenia-3285267.1370085_exp/
Pictures:
https://www.dropbox.com/sh/z446fie7mjmenzr/AACvbUxdA_wC_cQJ8LKv3Yd4a?dl=0
Charming duplex loft-style apartment with a private roof terrace in the heart of Palma's Old Town. 425,000 euros
Pictures:
https://www.dropbox.com/s/9u07rvv9i5g3l53/W-021FGF.zip?dl=0