Sales volume of property in Mallorca surged 28 per cent in 2014 compared to 2013, according to Engel & Völkers. The estate agency reports that its total sales volume in 2014 reached €259M, up from €202M in the previous year.
The figures arrive as sentiment surrounding Spain’s property market becomes increasingly positive.
Data from the Property Register shows that sales grew year-on-year in eight out of the first 10 months of 2014, compared to just three out of 10 in 2013. The IMF recently declared that Spain’s property values have already bottomed out. On TheMoveChannel.com, meanwhile, demand for Spanish property hit a 12-month high in November 2014, and in December, the US and Spain were both neck-and-neck in the race to win over the most buyers: the countries each accounted for 1 in 10 enquiries on the property portal.
Engel & Völkers highlights Mallorca’s stable market as key to its international appeal, with buyers also tending to make decisions regarding purchases faster.
This year, the Spanish Government has also introduced a series of beneficial tax breaks for foreign investors; the capital gains rate will be reduced from 21 per cent to 20 per cent this year and to 19 per cent in 2016. There’s a substantial reduction in Inheritance Tax from 34 per cent to 1 per cent and 7 per cent for transactions to immediate family (spouse and children).
With LTV up to 70 per cent with fixed interest rates in the first year starting as low as 2.75 per cent changing to 1.85, the mortgage market is also increasingly attractive for overseas buyers.
These are both given a boost by the current weakening in the single currency. Indeed, while German speaking buyers continue to dominate the market, the strengthening pound sterling against the Euro has brought in more British buyers, says the agency.
Indeed, the UK accounted for almost 3 in 10 (28 per cent) visitors to TheMoveChannel.com in 2014, overtaking the USA (down from 38 per cent to 10 per cent), as the strength of the pound against the euro fuelled investor appetites. Propertyshowrooms.com also saw a 16 per cent increase in enquiries from UK-based investors in 2014 compared to the previous year.
The site also reports a rise in typical buyer budgets, with the maximum budget searched for by buyers climbing from €295,534 in 2011 to €469,752 in 2014 – a rise of 59 per cent in three years.
Oisín Mac Giolla Chuda, General Manager for Propertyshowrooms.com says that the rising budget among overseas investors is “extremely encouraging”.
“It’s likely that the difference in max budget is an indication of the rise in investor confidence and spending power over the last few years,” adds PropertyShowrooms.com’s report.
On Mallorca’s West coast, says E&V, British buyers dominated the market in 2014, with the average sales value increasing to €1.27M. Other countries, though, are also stepping up their appetite for Spanish property, with the Balearic Islands proving particularly resilient to wider uncertainty or financial concerns.
E&V has seen a sales increase of 25 per cent over 2013 in the exclusive residential area of Son Vida strategically located between Palma and the south west. In Palma, sales are on a par with 2013 rising by approximately 10 per cent for the fashionable Portixol/Molinar areas just outside the Palma’s old town.
In Mallorca’s South West, where over 40 per cent of all property sales are made on the island by E&V, there has also been a property boom, with sales totaling €125M; 43 per cent higher than the previous year.
In the Centre and South of the island, the agency is reporting more sales activity for properties and increased demand for plots. Some non European investors from America, Canada and Australia have been encouraged by the Golden Visa and are spending from €500,000 – €2M.
Hans Lenz, Managing Director, Engel & Völkers South West, says: “In Mallorca top end real estate has had another good year and a new segment of the luxury property market in the €5M price range is developing in areas all over the island. Prior to 2007, a top luxury villa would have been priced at around the €2M mark. However, in today’s market that price bracket has moved up to €5M. This recent trend, which started in the south west, is now becoming more common place.”
Source:: The Movechannel