It's peak tourist season in Mallorca, and alongside the usual holidaymakers flying in to enjoy the sun, sea, culture and Richard Branson's new Son Bunyola hotel, more people are looking for properties.
Prices are also rising. Beachfront property prices went up 15% by June 2023, according to a study by real estate consultancy Savills, which ranks Mallorca in the top five places to have a second home. Savills' list looks at cost and other factors, such as quality of life, airport connections and the range of high-end restaurants and hotels, where Mallorca scores highly.
The average asking price in Port Andratx, in the southwest of the island, was about €5 million ($5.46 million) in 2022, up from €4.5 million the previous year, according to Engel & Völkers. Country houses and estates close to the popular village of Deya, where a Belmond hotel is located, have seen prices rise to €4 million, up from €3 million the previous year.
This price boom has made housing more unaffordable for locals. Foreigners bought around 36% of the properties sold in Mallorca and the neighbouring islands in the fourth quarter of 2022, and property prices in the Balearics are higher than any other Spanish region. Spain is now one of the world's top destinations for high-net-worth individuals, which is also driving prices up, according to Knight Frank analysis.
According to idealista data, the Balearic Islands is once again the most expensive province to buy a property (€3,973/m2), ahead of Guipuzcoa (€3,422/m2). These provinces are followed by Madrid (€3,143/m2), Malaga (€2,964/m2), Vizcaya (€2,732/m2) and Barcelona (€2,687/m2).
The introduction of direct flights from New York to Palma by United Airlines last summer attracted a new type of client with high purchasing power from the USA to the island. Although most foreign buyers are German, British and French, the American share is growing. Moreover, the exchange rate between the euro and the dollar is favourable for US buyers.
Charlie Hill, co-founder of real estate firm Charles Marlow, told Bloomberg that almost 50% of clients now come from the US. "The US market went from being an occasional visitor or buyer to becoming a regular," he says. This summer, he is handling a record number of viewings, including one from a New York buyer who wants to buy an old hotel to move to Mallorca with his family.
Foreigners, particularly digital nomads, seek year-round residences, not just vacation homes.
Spain's digital nomad visa policy, which launched at the beginning of 2023, allows remote workers with an income of €2,334 per month to reside in the country for five years and then apply for permanent resident status. It offers Americans the opportunity to live on the Spanish island, but for Brits, it serves as a solution to the Brexit-imposed restrictions that came into effect in 2021.
Article seen in Bloomberg
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