Engel & Völkers reports a good result for Majorca, Ibiza and Menorca, despite the current coronavirus pandemic. “The unwavering interest among international clients in the Balearic Islands is reflected in the transaction figures. The financial year finished on a high for us, with a total transaction volume of 460 million euros,” says Florian Hofer, Managing Director of Engel & Völkers on the Balearics. The slight decline in transaction volume over the previous year (2019: 517 million euros) can be attributed for the main part to the travel restrictions imposed during the lockdown periods in spring and winter. “The upbeat buying activity of international clients, however, meant that we soon caught up with postponed sale closures during the summer months, and reinforced the appeal of the Balearic Islands as a home base offering an excellent quality of life, and as a safe holiday destination,” Mr. Hofer continues. In the first three quarters of 2020, foreign buyers accounted for approximately 44 percent of all property transactions on the Balearics. Over the course of 2020 as a whole, the average sale price registered by Engel & Völkers for residential properties on Majorca levelled out at 1.5 million euros (2019: 1.47 million euros). On Ibiza, the average sale price of Engel & Völkers deals were 1.3 million euros (2019: 1.1 million euros) and 1.1 million euros (2019: 0.9 million euros) on Menorca.
Strong demand and stable prices for real estate on the Balearics
International buyers commit to long-term investments with high quality of life on Majorca
“The pandemic will not lead to a drop in demand for properties in prime locations in the long term. International buyers in particular see Majorca as a safe haven for a second home and appreciate the high quality of life that the island offers throughout the year,” says Hans Lenz, Managing Director of Engel & Völkers Majorca Southwest and Chairman of the Balearic Islands Real Estate Association (ABINI). According to Spain’s Notary Association, the average sale price for new-build properties on the Balearic market as a whole rose by 11.6 percent in the third quarter of 2020, marking the highest growth in Spain. Last year, the Majorcan market was dominated by clients from Northern and Central Europe in particular. The majority of clients buying through Engel & Völkers are from Germany (62 percent), the UK (13 percent) and Scandinavia (6 percent). Spanish buyers account for 8 percent of transactions, while buyers from Switzerland make up 3 percent.
Buyers from Europe gravitating towards fincas and estates with ample room and privacy
“Just how important it is to live in a beautiful and secure home becomes especially clear during times of crisis. Many clients aspire to own a retreat in a rural region surrounded by nature or the sea,” says Christina Deutsch, Managing Director of Engel & Völkers Majorca Central & South. Travel restrictions in place at the moment are making in-person property viewings difficult. But thanks to innovative technology, Engel & Völkers real estate agents were able to conduct over 27,000 virtual 3D property viewings in total last year on Majorca, as well as produce 300 live video tours. “We are benefitting immensely from the focus we’ve placed on digitising our real estate business, combined with our strong market presence on the island stretching back more than 30 years,” says Christina Deutsch. She adds: “The number of clients looking for properties at the centre and to the south of the island rose by around 40 percent last year. Drawn by the excellent infrastructure with good medical facilities and international schools, along with convenient links to airports across Europe, many clients are opting to temporarily relocate their primary residence to Majorca where they can combine leisure with remote working from their holiday home.”
Outlook: Stable price development and transaction volume expected for 2021
Market experts are optimistic in their forecasts, due to the steady prices and dynamic buyer activity registered during the summer months of last year, along with consistent demand for virtual viewings and video tours. “Many clients can hardly wait to finally view those apartments and houses they have their eye on in person. As soon as falling infection rates and vaccination programs make unrestricted travel possible again, buyers and sellers will continue where they left off with their real estate plans and start closing property transactions again,” says Florian Hofer, concluding: “Prospective buyers were very quick to close contracts last year. This proves once again that the Balearic Islands remain popular with international buyers as a safe haven for real estate.”