Real estate in Mallorca: the fulfillment of a dream
The two terms "real estate" and "luxury" are often mentioned in the same breath when it comes to Mallorca. However, the market offers much more than just high-priced properties. Finding them depends on the estate agent's portfolio and a little bit of luck.
The year 2006 was a record year for the real estate market in the Balearic Islands: The total amount of transactions was an astonishing 5.2 billion euros. Just two years later, the boom ended with a financial crisis. The market was characterized by caution and restraint on the part of potential investors. Since then, however, the situation has gradually improved.
New record yearThe industry is currently looking at a new record. According to the Ministry of Transport, Mobility and Municipal Agenda (MITMA), a total of 6.6 billion euros worth of houses and apartments were sold on Mallorca and the neighboring islands last year (see chart on page 49). Real estate sales on the Balearic Islands have never brought in such a sum. In Mallorca alone, real estate sales reached an impressive 5.1 billion euros in 2021.
The figure is particularly impressive if you look at the total sum for the Balearic Islands from 2019, the last year before the coronavirus pandemic: the volume for all Balearic Islands was 4.15 billion euros.Upswing due to luxury real estate
The statistics also show that prices for luxury properties in particular have risen over the past 15 years. Last year's 6.6 billion euros included just over 17,500 sales of houses and apartments. In the last record year, 2006, around 25,800 properties changed hands for 5.2 billion euros.
Regional differences
The number of available properties varies from region to region (see chart on page 48). According to an analysis by "Engel & Völkers", the preferred areas for property purchases are the southwest of the island and the Palma area. Last year, 58 percent of real estate offers were located here. The southwest, west and the area around Palma are less well represented. All three areas accounted for eleven percent of the properties on offer at "Engel & Völkers". Demand for the other regions of the island is also rather low at seven to ten percent. However, this is precisely what gives resourceful buyers the best opportunities to find attractive and available houses and apartments.
Friendly, without a fat wallet
The demand for real estate in Mallorca remains high. Anyone looking for a suitable property should not be fooled or put off by the figures and statistics. Not all properties are in the luxury sector. The diversity of the island with its different regions and offers is reflected in the portfolio of providers and estate agents, and you don't have to have a big wallet to find the right property, says Antonio Rey from the Palma Beach branch of estate agent Engel & Völkers. "There are many properties on the island, from small studios or apartments to large villas." Prices start at around 150,000 euros. However, there is a wide range upwards, says Rey and adds: "It depends on the property, the region and the location."
Jürgen Dreckmann from the real estate company Perfect Mallorca takes a similar view. Much more important than money is a little bit of luck and a good estate agent who thinks of the customer when a suitable offer comes across the table.
For this, however, the estate agent must also act as a consultant and have as much detailed information as possible from the client,
says Dreckmann.Diverse demand
There is currently demand for everything from small and large apartments, chalets and villas to properties and restaurants.
For Frank Steinhoff from the real estate agency de Haas & Partner in Artà, the classic finca with three bedrooms, two bathrooms and a pool is right at the top of his clients' wish lists. "Younger clients in particular are also looking for interesting city homes with a good internet connection, as they not only want to live on Mallorca, but also work independently," says Steinhoff.
Location is important
Location continues to play an important role for prospective buyers. And it varies from person to person. Many customers are looking for properties close to the sea. Others appreciate peace and solitude and are interested in secluded houses on fincas. Even community complexes are of interest.
Owning your own home is a dream for many prospective buyers. Ultimately, it always depends on your own wishes and actual needs. "A house is not always really suitable or needed," says real estate expert Jürgen Dreckmann, referring to the ever-interesting apartment offers in the portfolio.
Guidance from experts
Knowing and loving Mallorca from stays is one thing. Investing in real estate on the island is another. Those who have the choice often agonize over the pros and cons of the selection. You can, but don't have to, come with specific ideas. After all, brokers are there to provide competent guidance and support.
Clients often come with clear ideas as they may already own a property, know the island and the region and therefore know exactly what they want," says real estate expert Antonio Rey. However, there are also many clients who do not know their way around and are reliant on recommendations and expertise. "In these cases, advice and help are extremely important," says Rey. "And that applies to both buying and renting."
Jürgen Dreckmann from Perfect Mallorca also confirms this. Most customers have a clear idea of what they are looking for, including a small list to tick off.
On site, this is usually put into perspective, because this is where emotions come into play. Of course, the basic requirements, such as size, number of rooms, etc., have to be right. But everything else is decided by the gut - usually that of the women," adds Dreckmann with a wink.
Choosing and comparing
On average, customers look at two to four properties before making a decision,
explains the estate agent with a view to the Palma Beach region. In other cases, it can also be a few more properties.
The number of properties visited varies greatly, explains Jürgen Dreckmann from Perfect Mallorca. It depends on the type of client and their needs. "We have already looked after clients with whom we have viewed several properties, although it was already clear after the first one that it should be this one." However, there are also longer accompaniments. It often takes a few years to find exactly the right property for a client. Only then are the property, timing and all the other details right, says Dreckmann.
Understandable, because after all, it's not about spending money quickly. Anyone thinking of buying property in Mallorca will either bring the necessary money with them or will need a loan or mortgage for part of the amount. In these cases, too, the competent advice of experts is important. Spanish laws are complicated, and people often forget that in addition to the purchase price, numerous additional costs, taxes and duties have to be paid. If you go into a transaction naively, you could be in for a rude awakening in the end.
This relates, not least, to the intended use of the property. Some buyers want to use the house or apartment themselves, while others are thinking of renting it out temporarily or investing in it exclusively. Since Covid, many foreigners have opted for a second residence in Mallorca, but some also use the purchase as an interesting and stable investment," says Antonio Rey from Engel & Völkers. "Most clients are looking for themselves," explains Jürgen Dreckmann. However, the topic of renting is also included because some have the idea of making the property more profitable. However, this usually comes to an end once the interested parties have been informed about the effort, costs and requirements of letting. The viewpoint also changes once the new home has been lovingly and personally furnished. Many owners then refrain from renting because they do not want strangers in the family nest, says Dreckmann.What buyers should consider
Prospective buyers should pay attention to various points. First and foremost is detailed information about the location, the region and the infrastructure in which you are interested in a property. Support from experts is also important. They should not just be out to sell a property, but to make the real estate purchase a matter of the heart. That means: Offering support from the first contact to the completion of the purchase and the so-called aftersale.
The third point sounds simple, but it is extremely difficult: "You have to decide on the right property and get the right information and advice about it," says Antonio Rey. If you think about the statement, however, it becomes clear what the real estate expert means. Every prospective buyer has certain expectations of a house or apartment.Only in the rarest of cases can these be implemented 1:1. But the better the description is based on individual ideas, the closer you get to your dream property. You should therefore tell the estate agent you trust all your ideas.Be critical and careful
Real estate agent Jürgen Dreckmann from Perfect Mallorca goes into more detail. "Stay critical and cautious", is his first, well-intentioned advice. Just because someone speaks the same language and is a good storyteller does not mean that everything is right. "Many people then recommend going to a lawyer", says Dreckmann. However, you should also be critical here. A lawyer will not inspect the property and will therefore never be able to advise clients. He will only be able to check things in the land register and at the building authority. The point for advice therefore clearly goes to the estate agent. This should be registered, explains Jürgen Dreckmann.
Take your time
Take your time and have a look at the island. The fact that well-known personalities live in location A does not mean that this location is also the right one for the customer, says Jürgen Dreckmann as an example. Mallorca is, thank God, so diverse that every zone has its customers.
After all, it's all about your own wishes and preferences.
No to the option contract
Another piece of advice from the expert at Perfect Mallorca: "Do not sign an option contract if you have not inspected the property and the financing is in place." Time and again, buyers are tricked into signing an option contract by an estate agent or owner. The story always sounds the same: "There are still x number of interested parties. If you don't sign now, I won't be able to keep the property available for you," explains Jürgen Dreckmann, adding that every customer has as much time as they need. Real estate agent Frank Steinhoff recommends that customers only start their search when they are really "ready to buy" and "capable of making decisions". "With the current very high demand, there is otherwise a risk that the desired property will suddenly be bought by another interested party." In addition, you should apply for an NIE number at the start of the search in order to be able to act more quickly when buying.
