Spain Info May: The Mallorca Market Report

 

Europe's biggest property magazine, BELLEVUE, is once again focusing on the popular holiday island of Mallorca in its latest issue. In the following, I am mainly referring to the research and text of this Mallorca special by the author Claus-Peter Haller. 

The sun shines for around 2,800 hours a year on Mallorca. However, the sunnier weather is not the only reason why more and more people are moving to the island permanently. The developments of recent years, with all their crises such as coronavirus, the war in Ukraine, immigration, skills shortages, inflation, climate change, and political hiccups, have changed the attitude of many citizens towards their country. They are simply fed up with the prevailing miserable mood at home and are ready for a new chapter in their lives. And it's not just the representatives of the baby boomer generation, who are now around 60 years old, have sold their companies or have earned enough in their working lives to treat themselves to a place on the sunny side for the remaining years. More and more younger people are also moving to the island. They have inherited or can do their jobs from anywhere thanks to video calls and fast internet. Some commute every few days or weeks.

 

Whole families are now moving to Mallorca. Spain's public schools are no worse than those somewhere else. Those who can afford it enrol their children in one of the private, international schools. There are more than a dozen of them on Mallorca. They cost between 500 and 1,500 euros per month, depending on the age of the child and services, generally enjoy a good reputation, offer small classes with international teachers and classmates, and the children grow up multilingual and well looked after. Mallorca is not only a beautiful island in terms of landscape and climate, but also offers a high quality of life all year round, at least in large parts. And another important point, you can get by on the island even without fluent Spanish.

(Picture from Alexandra Koch on Pixabay)

What should prospective buyers do when looking for a Mallorca property? Above all, leave the search for a suitable property to an estate agent. That's their job, and it doesn't cost anything extra because their brokerage fee is included in the purchase price. If you start looking for a property on your own, you will quickly become overwhelmed or frustrated by the variety on offer. Create a checklist together, which the estate agent can use to search for suitable properties.

Properties on Mallorca generally "turn" faster. If a house is sold in mainland Spain, it usually takes decades before it comes back on the market. On Mallorca, holiday properties are often for sale again after just a few years. If you have found an estate agent with whom you have good chemistry, you have a better chance of success. Very few properties are under exclusive contract, most can be brokered by all estate agents. It is not uncommon for properties to be sold jointly. One agent has the right property, the other agent, the right potential buyer.

(Picture from Matthias Lemm on Pixabay)

What is the market situation now?

 

After Covid pandemic , Mallorca's property market experienced a two-year boom. The market has been calmer again since autumn 2022. There is still plenty of demand, but prospective buyers are more reluctant to make decisions.

The independent "Centre for Real Estate Studies" (CRES) has been analysing Mallorca's holiday property market since 2015. The 2024 study presented in February essentially contains the following statements:

- For the first time, the island-wide average price for luxury properties is more than 10,000 euros per square metre.

- Supply is decreasing, especially for basic and luxury properties.

- Property prices have risen by up to 78 per cent since 2015.

- There is no end in sight to the price increases.

Buyers on Mallorca continue to come predominantly from Germany, but the British also continue to enjoy buying on the island, as do an increasing number of Scandinavians and US citizens.

Since 1 January 2024, the burden of property tax has been reduced. The tax threshold has been raised from €700,000 to €3 million per person (€6 million for a couple), regardless of whether they are resident in the Balearic Islands or not, and applies to all tax returns filed from 2025 onwards. From now on, only net assets of more than 3 million euros will be taxed. Two other topics that are very exciting for property owners are also being discussed (mind you: far from decided): On the one hand, a pragmatic solution is to be found for illegal buildings in order to legalise them without penalties. Many rural properties have unauthorised pools or illegal extensions such as unregistered garages.

Similar rumours are circulating on the subject of renting. For years, it has been impossible to obtain a rental licence for a holiday home. If an opportunity arose for easier lettings, the island's treasury could benefit and would have new funds to invest in urgently needed social housing.

We will keep you up to date on these topics. For all those who are currently looking for their dream property in Mallorca, here is a selection of our current offers.

Of course, you can always find more interesting properties on our website www.sucasita.eu.

Or you can simply give us a call. You can reach us on +34 966 790 012.

With best regards

Jan Hannemann and the Su Casita team