Broker and industry expert Jürgen Dreckmann üon the market situation, risks, legal pitfalls – and why sound advice is more important than ever.
The real estate market in Mallorca remains dynamic – but also challenging. Between growing regulatory pressure, falling supply and rising prices, a clear head and sound knowledge are needed now more than ever. Bauen & Wohnen Mallorca met with Jürgen Dreckmann, Managing Director of Perfect Mallorca, for a summer interview. He talks openly about current developments, legal pitfalls and his assessment of the second half of 2025. A conversation with added value for anyone who wants to buy, sell or simply understand how the market on the island is really developing.
Mr Dreckmann, how would you describe the current market situation forür real estate in Mallorca? Are there any noticeable trends or shifts in supply and demand?
In our view, the current market situation is primarily characterized by a low supply of properties. In over 20 years of activity, we have never experienced this in this form, despite all the ups and downs.
This drives up prices and tempts one or two sellers to offer their property at an overpriced price. Unfortunately, there are enough estate agents who play along with this game because they want to take the property and do not want to or cannot enter into discussions with the owner.
Which legal innovations in the real estate sector will be particularly relevant for buyers or owners in 2025 especially with regard to building regulations or energy standards?
At the moment, I don't see any new regulations that mean anything new.
In the case of new buildings that the buyers plan and build themselves, high-quality installations are usually planned in by the builders. If you look at the builders' standards, there is still a lot of catching up to do in terms of contemporary construction.
But that doesn't mean it won't happen. Unfortunately, depending on the municipality, we are in an uncertain area where things can change quicklyn.
How will the latest regulatory measures taken by the Balearic Government – e.g. the new regulations? B. in the vacation rental sector – on the real estate market ?
In recent years, we have long had the issue that there have been no new vacation rental licenses. We have always pointed this out to our customers and often the request for the license turned out to be just a possible option. Once we had explained to interested parties what they needed to bear in mind when renting out a property and what the bottom line was for properties that the owner used themselves, the issue of a rental license was usually quickly resolved. Many customers had the wrong idea about how it works and what the bottom line is for an owner-occupied property.
In this respect, we believe that nothing changes for most prospective buyers.
We have always been critical of prospective buyers who can only finance their property purchase with the help of vacation rentals.
What should buyers from German-speaking countries currently pay particular attention to when it comes to financing and tax planning?
When it comes to financing, it is important to understand the differences between mortgage rules in Spain and the respective home country. Financing in Spain offers some significant advantages over Germany, but these need to be explained.
A very important point if you are dependent on financing:
Do not sign a preliminary contract if you do not yet have a final financing commitment from the bank! In case of doubt, the deposit - 10% of the purchase price after all - may be gone.
The tax planning usually concerns more the properties in the high-price segment. On the one hand, you should be aware of the structuring options and their effects. On the other hand, these are usually only worthwhile with a higher sum.
With the current regulation on wealth tax, which only applies from 3 million euros per person, most transactions are not affected anyway.
Another point is the proposed 100% real estate transfer tax for buyers outside the EU. Here you have to keep a close eye on what ultimately becomes law. The affected group of buyers will then certainly no longer simply buy, but will then be dependent on the possibilities for structuring their purchase.
Will there be new or adjusted tax obligations for non-residents, for example for rental income, gifts or the sale of real estate?
A number of new regulations have come into force this year. We are not following this in the rental sector as we do not operate a rental business. But under certain conditions, long-term rent can even be collected tax-free.
The gift tax rate for close relatives (level 1) has been at just 1% for a long time, but now the 0% tax is also available here under certain conditions.
And currently, the tax rate for more distant relatives has also been greatly reduced.
The topic of sustainability: How much does the topic of energy efficiency now influence property values on the island– and which technologies are particularly in demand?
In the lower and middle segments, this doesn't really play a role when buying. However, as soon as these properties are renovated, they are modernized accordingly and often brought up to date.
In the high-price segment, customers place much more value on modern and efficient furnishings. This is also reflected in the price. For older buildings in the segment that do not have this equipment, this sometimes leads to considerable discounts if this is not compensated for by a special location.
How s the supply of building land on Mallorca? Are there regions in which are currently particularly busy – or is new construction becoming increasingly difficult?
My view concerns private potential builders.
In our view, there is enough building land available if we were to take care of all the building plots that are available.
In our area of Manacor in particular, the problem is the building authority. Not, insufficiently or incorrectly staffed, it takes ages (sometimes even 4 years) for a builder to get his building license.
New employees in positions of responsibility have led to changes in the interpretation of rules and laws. We have never passed on so many issues to lawyers in all these years as we have since mid-2024. In Manacor, the citizens' protest is now stirring. In January, a meeting was held for this purpose I am also familiar with this issue in a more moderate form from other regions and any potential developer will have to keep a very close eye on it before making a purchase. This is only possible with professional support. Of course, different rules apply to large building sites What advice do you have for owners who want to sell in the near future? Are there any legal or tax optimization options that are often overlooked? It really depends on the personal situation of each buyer. Depending on the case, you have more or less „room for maneuver“. And yes, I would think that most brokers are not aware of these possibilities. Because we also have a service operation similar to a fully-fledged Gestoria, we are positioned differently in terms of content and can advise customers better. Are there typical mistakes that real estate buyers in Mallorca make time and again despite good preparation – and how can these be avoided? One of the mistakes is to let a salesperson or estate agent put you under pressure: "You have to decide now because there are others....We already have offers from others, but we'd like to sell it to you....That's not bad, that's the way it is in Mallorca...." I fully understand the emotional situation of the buyers. But this is good when choosing, but bad when closing. Because you should keep a clear head when closing and only sign when everything has been considered and clarified so far. Also, you should never sign a mortgage or option contract until you have a financing commitment from the bank if you are reliant on the mortgage. It's better to lose the bank's costs because the property is gone than the 10% deposit because you can't settle. Finallyßend: What developments do you expect for the second half of 2025 – will Mallorca remain a stable and attractive real estate location for investors and private buyers? Yes, looking into the crystal ball … we expect Mallorca to remain stable and continue to be the preferred place to invest in a vacation property for many prospective buyers. However, not everyone will be able to fulfill this dream as easily as before. The market will continue to change. However, we are looking forward to this. Our response to the changes in the market is that we will represent the international real estate brand Fine & Country in Mallorca from September 2025. Perfect Mallorca S.L.
In Cala Murada, we have the discussion about the lack of sewerage, which means that building permits are not granted or are only granted if the developer builds the sewerage on their own account and gives it away to Manacor.
Our presence as Perfect Mallorca will remain as before and with the experience of more than 20 years on Mallorca, we are also expanding the representation of Fine & Country on Mallorca.
Interview with Jürgen Dreckmann
Via Europa 45-6
07688 Cala Murada
Tel. +34 971 82 81 24
Fax +34 971 82 81 45
office@perfectmallorca.com
www.perfectmallorca.com
