Lutz Minkner knows the real estate market like no other. And he knows Mallorca. Here are his tips for home buyers.
The decision to buy property on the island should not be made under the influence of a moody sangriaevening. This is probably the most important, albeit tongue-in-cheek, advice from real estate professional Lutz Minkner. If you want to fulfill your dream of owning your own four walls in Mallorca, you should rely on proven experts and their guidance.
Mr. Minkner, you are a real estate expert and a true "veteran" in the Mallorca real estate market. What fascinated you about Mallorca and how did you get into the real estate sector? I studied law and economics, and in addition to my legal work as a lawyer, lecturer and author of specialist books, I have always been active as an entrepreneur in the real estate sector. So it was only natural that my wife and I turned to the real estate business after moving to Mallorca. When choosing where to live, we looked around southern Europe, for example on the Cote d'Azur and in Tuscany. However, as I still had consulting contracts to work off in Germany, I chose Mallorca because it had the best flight connections to Germany three decades ago. And, of course, we had already fallen in love with the island during our first visits.
How has the real estate market on Mallorca changed in recent years, and what trends do you currently see?
2019 was a boom year for Mallorca's real estate market. The development was significantly slowed down in 2020 due to corona. You will remember that the airport was closed for more than three months. We also had to close our shops by order of the authorities. The market then picked up again in 2021 and 2022, but collapsed again by around 20% in 2023. The luxury market, in which Minkner & Bonitz üpredominantly operates, continued to produce good results, so we are talking about a sideways movement for 2023. I don't want to mention any specific trends, as discerning customers - predominantly from Germany, Austria and Switzerland - are looking for good locations and top building quality in every price segment.
What challenges do you currently see in Mallorca's real estate market?
The voted-out left-wing government has done a lot to destroy confidence in Mallorca's real estate market. When parliament is thinking out loud about restricting the influx and investment of foreign guests, when property transfer taxes, profit taxes and property taxes are constantly being raised, this scares off investors. When former Prime Minister Armengol propagated the top-down distribution of wealth as her primary political goal and squatters were given more protection than homeowners, investors lost interest in Mallorca. With the new conservative government under Marga Prohens, confidence is growing from week to week. The first measures, such as the laws to (almost) abolish inheritance and property tax, point in the right direction.
Hurdles can be overcome. However, you should never make an investment in Mallorca without the help of proven experts - brokers, lawyers, tax advisors, architects and financing specialists. If you approach your property purchase not under the influence of sangria, but with the necessary prudence and advice, you will create the conditions yourself to ensure that your real estate dream does not become a nightmare.
Mallorca has also become increasingly popular as an investor market in recent years. For investors who are considering buying a property in Mallorca:
What tips can you give from your many years of experience?
This follows on from the previous question. When looking for a property, you need to find an experienced estate agent who knows his area like the back of his hand, but who also knows the basics of building law, speaks Spanish and can read the land register. A professional estate agent plays the real estate industry's keyboard to perfection and consults legal and tax experts when in doubt.
Mallorca is diverse. Are there certain regions that you consider particularly attractive, whether for buying a property, for your own use or as an investment?
How do you assess the future development of the real estate market in Mallorca, particularly with regard to demand from German-speaking countries?
Sustainability is becoming increasingly important. How strongly is this topic already influencing the real estate market today and how do you think it will influence the market in the future?
There are many interesting regions in Mallorca where an investment is worthwhile. However, every buyer has a different dream. Some are looking for a villa by the sea with a terrace from which they can spit cherry pits into the water. Others are looking for a charming country house in the middle of the island. Still others are drawn to the metropolis of Palma with its huge cultural, gastronomic and shopping offerings. Minkner & Bonitz concentrates his work on the southwest of the island – Palma to Port Andratx, where around 60% of property sales to foreign investors take place and which is recognized as having the best infrastructure.
We expect 2024 to be a peak year for Mallorca's real estate market. As the business newspaper CAPITAL wrote in January 2024, Mallorca has become even more attractive for investors looking to invest due to the poor economic data from Germany. Today, the technical conditions have been created, especially for freelancers, to run companies in Germany from Mallorca. In addition, the new legal regulations in inheritance and property tax law make Mallorca the number one investment location in Südeuropa.
Investors have been paying attention to sustainability when building and living in Mallorca for years. The solar industry can barely keep up with the production and delivery of photovoltaic systems. There are also good prospects for the production of green hydrogen on Mallorca. Many customers are keen to live on our beautiful island in a way that conserves resources. Developers take this into account by making sustainability one of the most important criteria right from the planning stage.
We don't live under a bell jar in Mallorca, we also look very closely at what is happening around us. And like everywhere else in the world, where there is a lot of light, there is also a lot of shadow. For many years, we have supported the ASPANOB organization, an association of parents of children with cancer, and the LIONS PALMA „Comida para todos“ campaign, which provides thousands of families in Mallorca with basic necessities via various food banks. When we are able to help again and again and experience gratitude, these are the most remarkable experiences for us. We would also like to take this opportunity to thank the many volunteers from these organizations.
Once again: Look for proven experts to accompany you. Don't hesitate too long (because it doesn't get any cheaper!) and realize your dreams. We've been living in Mallorca for over 30 years now and haven't regretted our decision for a second.
Minkner & Bonitz. He looks back on 45 years of professional experience
as a lawyer, lecturer, specialist
as a lawyer, lecturer, author of specialist books and entrepreneur.
