The price of luxury properties in Mallorca has risen by up to 29% over the last year
The luxury residential holiday property market is shrinking considerably in Mallorca, which is having a direct effect on the rising prices of sale and purchase transactions, which are steadily increasing and have risen by up to 29% in the last year, according to a report by the Centre for Real Estate Studies (CRES) of the Steinbeis Transfer Institute (STI), based in Freiburg. Prices are rising and the trend continues to increase due to higher demand in the German market.
The study, now in its eighth edition, shows that the main estate agents on the island are currently offering some 3,750 properties. This represents a decrease of 18% compared to the previous year. On the other hand, there are some 550 active residential projects and some 500 more in the planning stage.
Prices in the luxury segment are rising disproportionately. “In the south-east (see attached graph), prices in the upper segment increased by around 29%, followed by the north-east with around 24%. The north-west also recorded an increase of 22 %. The average price in the luxury segment ranges from 6,250 euros in the centre to 9,860 euros in the southwest. So here, almost 10,000 euros per square metre are already being asked for a luxury property. In the upper segment, prices range from 4,250 euros in the centre to 7,500 euros in the southwest,” CRES points out. In Mallorca, however, not everything is always luxury.
The director of the study, Professor Marco Wölfle of the Center for Real Estate Studies (CRES), points to a new trend: “It can be observed that the supply of holiday resort flats has decreased considerably in the last year. It is possible that this type of property has been particularly sought after as a residential and work address during the pandemic. Leaving a holiday flat unused for a long period of the year is not problematic and is also much less expensive than a house with a swimming pool. Not to mention the purchase price.
The industry is reacting to this. Today, one in four new construction projects is a holiday complex, in 2021 it was only one in five. Prices for a new-build flat of 100 square metres, with average equipment and no sea view, start at 300,000 euros.
The director of one of the most important real estate agencies in Mallorca says: “Whoever wants to buy a property in Mallorca at the moment has to make a decision in the short term. Once an attractive property comes on the market, it will quickly come off again. The trend towards luxury properties continues. Not only in Palma and the southwest, but all over the island. It is specified that urban planning restrictions are driving the demand for already built properties. Not only in the luxury segment, but also in the upper end of the market with a lot of potential.
Sea views, according to the study, continue to be a relevant factor and affect the price for being on the front line and high premiums are paid for exclusive views. Another factor influencing prices can be a swimming pool. If a distinction is made between new and existing buildings, there is a considerable difference in price between properties with a simple pool and properties without a pool. The price of a luxury pool is even higher compared to properties without a pool.
By UH Diario.