Majorca property market: Stable prices and high season for sustainability

The real estate market on the popular Balearic island is profiting from the financial strength of European buyers and is undergoing a significant boom in demand at the moment. In Q1 2021, Engel & Völkers Majorca recorded a 66 percent increase in online client enquiries compared to the same period last year. “This all-time high in enquiries from prospective buyers reflects the desirability of refined living on Majorca and the security the island brings. The market for luxury property is resilient and the prices remain stable, even in times of challenging economic turmoil,” says Florian Hofer, Managing Director of Engel & Völkers on the Balearic Islands, adding: “The coronavirus has seen the issue of sustainability on the island shift even further towards centre stage. Property clients are increasingly looking for homes for their own private use. They are also becoming more environmentally aware and this factor is increasingly guiding their investment decisions.” 

Palma de Mallorca: Living in a Mediterranean setting  

The island’s capital is benefiting from major investments in modernisation projects, as well as the realisation of more environmentally friendly mobility concepts. This is enhancing the overall appeal of Palma de Mallorca, especially among those clients looking for a sustainable home in the Mediterranean with long-term potential and a high quality of life. Last year, the average asking price for apartments in the prime location of the Gènova district on Palma’s outskirts even increased to 1 million euros, while average prices in the prime locations of the historic Palma Old Town for comparable properties stayed at a high level of 800,000 euros. In the trendy Portixol district, average prices for apartments range from 700,000 to 800,000 euros. Searching clients have a primary interest in penthouses and apartments with either a terrace or balcony. New builds featuring sustainable construction and the highest quality standards are also in strong demand.

Southwest and Son Vida: Luxury retreats as year-round residences

Stable prices for residential and holiday properties in all regions of the island 

European clients showing a strong interest and readiness to buy  

Buyers from Northern and Central Europe dominated the market on the island in 2020: The majority of Engel & Völkers clients come from Germany (63 percent), the UK (12 percent) and Scandinavia (6 percent). Spanish buyers make up 8 percent of transactions, with buyers from Switzerland attributing for 3 percent and Austrians 2 percent. “The desire to travel has intensified during the lockdown and we are seeing that buyers are now quicker to make a decision to sign a contract after viewing a property. Travel restrictions have meant that virtual property tours have established themselves as an essential part of the buying process,” says Nils Haase, Managing Director of Engel & Völkers Majorca Southeast. In this part of the island, the transaction volume generated by Engel & Völkers in 2020 rose considerably by 30 percent over the previous year. Engel & Völkers carried out 27,000 virtual 3D tours and 300 live video viewings in total last year.

Outlook: Majorca offers long-term prospects and investment security  

Considering the high number of client inquiries at the start of the year, and with the experience gained from past lockdowns, the experts at Engel & Völkers are confident that Majorca will continue to develop on a positive course. “In 2020, the market for premium properties was particularly buoyant, with sales prices ranging between 8 and 12 million euros. Wealthy clients tended to invest in properties in a price category where trends are separate from the general economic cycle,” says Hans Lenz. “Past recessions have shown us that real estate in Majorca’s prime locations is a sound investment due to its value retention, and the resilience that comes with that”, concludes Florian Hofer. Anyone investing in a property on Majorca, be it as a capital investment or a holiday home, is set to benefit from a good mix of stability in value and the emotional returns of residing in the property oneself.