In the south-west the number of properties offered for sale is down by a third.
- Despite the increased amount of new constructions offers have reduced by almost 20 per cent
- Mallorca property prices rise by up to 18 per cent
- Almost 10,000 euros per square metre in the luxury segment
- Price level still significantly lower than in Germany
- Despite the high rate of new construction supply has declined around 18 percent
- Holiday-apartments also booming as second homes and home offices
- Mallorca real estate 2022 with price increases from 4 to 18 percent
- Property prices have risen by an average of almost 40% within seven years
- Almost €10,000 per square metre in the luxury segment
- Price niveau still significantly lower than in Germany
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Despite the high rate of new construction supply has declined around 18 percent
Those who currently want to buy a vacation property in Mallorca, must choose from a much smaller supply compared to last year, decide quickly and pay a higher price. That is the conclusion of an independent market study commissioned by the real estate agency Porta Mallorquina Real Estate. And experts do not see an end to the real estate boom in Mallorca.
The leading estate agents on the island currently have around 3,750 residential properties on offer, which corresponds to a decline of around 18 percent compared to last year. Added to these are about 550 active residential projects, plus some 500 projects in the planning stage. It is, however, noticeable that in the south-west, which for years has been the most expensive region, offers have decreased by up to 32 percent.
Porta Mallorquina Real Estate Manager Timo Weibel:
“Those planning to purchase a property in Mallorca at the moment should be prepared to make a quick decision, as an attractive property coming on to the market is very quickly snapped up. The trend towards luxury properties is continuing not only in Palma and the south-west, but now also island-wide.”
Playing an increasing role in this are the new building restrictions. In order to curb the construction of large luxury villas more rigorous restrictions have been introduced, for example including the maximum property and pool size, and the possibilities for rental.
“These restrictions are increasing the demand for already-existing properties, not only in the luxury category but also for upmarket properties with the potential for expansion and/or upgrading. The trend for new properties is, therefore, towards compacter but even more luxurious projects.”
Holiday-apartments also booming as second homes and home offices
Mallorca does not, however, always have to mean luxury. Study-leader Prof. Marco Wölfle from the Center for Real Estate Studies (CRES) recognises a new trend:
“We are observing that the supply of apartments in holiday complexes was greatly reduced last year, and it is possible that this type of property was particularly sought after to be a holiday home combined with home office during the pandemic. A holiday apartment not in use for long periods is relatively unproblematic, and also costs much less than a house with a pool – not to mention the initial purchase price.”
The industry is obviously reacting to this, as currently every fourth newly-constructed project is situated in a residential complex, whilst in 2021 it was only every fifth. Prices for a 100-square-metre newly-built apartment, with a standard specification and without sea views now start at 300,000 euros.
Mallorca real estate 2022 with price increases from 4 to 18 percent
All over the island market research has determined an average price per square metre of around 5,300 euros. This corresponds to an increase of 4.5 percent compared to 2021 (5,080 euros). This shows that continuing travel restrictions and lower numbers of tourists due to the Corona pandemic have no negative influence on the demand for holiday properties on Mallorca.
Regionally there are two upward-moving exceptions, both in the eastern part of the island. In the north-east, prices climbed by a good 13 percent and in the south-east by as much as 18 percent. In the north-east, the average price per square metre is now 4,500 euros and in the south-east 5,000 euros whereas in the other seven regions the increases of between 4 per cent and 7 per cent stay relatively close together. Price leaders continue to be the top locations of Palma and the south-west. There, average prices of 6,500 euros (Palma) and 7,300 are required. Entry-level prices can, however, still be found in the centre of the island, which is traditionally cheaper than coastal regions due to the longer distances to the sea. There, the average cost per square metre is just over 3,300 euros.
Property prices have risen by an average of almost 40% within seven years
Prof. Marco Wölfle is of the opinion that it has now been proved that Mallorca real estate is fundamentally suitable for investment:
“We have been studying property prices in Mallorca since 2015 and during this time values have significantly increased. Since only 2015 average island prices have risen by 37 percent, in the south-west even by over 50 percent, and all regions are above the inflation increase factor. This trend should continue, although healthy corrections may still occur, as happened in 2020. There are no signs of a bubble forming.”
Almost €10,000 per square metre in the luxury segment
Luxury-properties are particularly in demand island-wide. The average square metre price level in this segment ranges from around €6,250 in the central area to as much as €9,860 in the south-west where almost 10,000 euros per square metre are demanded for a luxury property. In the upper price segment, prices range from 4,250 euros in the island-centre to 7,500 euros in the south-west. In the middle segment the range goes from 3,080 euros to 6,000 euros (centre to south-west) and in the plainer segment from 2,160 euros (centre) to 4,560 euros (Palma city). Only one region can record a price decline in one of the segments – in the south-west basic properties only cost around 4,500 euros, which is around eight percent less than in the previous year.
Price niveau still significantly lower than in Germany
Compared to the German property market, prices in Mallorca are still low, both in comparison to the top 7 cities and the holiday islands of Norderney and Sylt. According to the IVD residential price index 2021/2022, prices for houses in Germany’s top 7 cities in the upmarket segment range between €4,000 and €13,300 per square metre, with Munich far ahead of all other cities in terms of price. The German islands are priced between 6,400 euros and 11,200 euros. In Mallorca, prices in the upmarket segment range between 3,150 euros and 5,900 euros per square metre.
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