As a company specialized in the luxury real estate segment in Mallorca, what is your assessment of current market sentiment and the appetite of foreigners for properties in Mallorca?
After the lockdown due to the COVID-19, Mallorca experienced a huge increase in demand for luxury properties. Indeed, most of the properties ready to move into in the luxury segment have been sold. The huge increase in demand has seen a related rise in prices, and we expect to continue to see this appetite from foreigners. The pandemic has shown that homes are more important than ever before, and many people have realized they can work from anywhere. Home office is a reality, and it will be difficult to return to where we were in term of office-based employment. In this regard, Mallorca has some of the best weather in Europe, is a one-to-two-hour flight from every major European city, its infrastructure meets European standards, and its schools and hospitals are also excellent. Many are questioning the logic of returning to their busy and colder countries. Germans, in particular, are ramping up their investments in Mallorca. Scandinavians are also still keen on investing here. The English were the first to arrive to Mallorca and this year it seems that the desire to invest in Mallorca has reactivated. The price of housing has risen 45% in 5 years in the Balearic Islands, the highest increase in the entire country. The price of finished housing (new and used) rose in the Balearic Islands by 9.3% during this year, leading this indicator at the state level. The strong local and international demand explains this upward trend in prices in Mallorca and the rest of the islands. Compared to 2019, the year used as a reference because it was before the pandemic, prices increased by 7% after some moderation in growth began. The savings of private households, the confidence of consumers and the new housing needs discovered during the confinement have boosted the demand, mostly for the purpose of use, although there is also a professionalized demand, attracted by the profitability of housing compared to other financial products. My estimate is that we will still have a buoyant market for some time.
Which areas on the island can have the highest yields taking into consideration the transition toward a more sustainable tourism business in the island?
The island is extremely conscious of environmental responsibility. We know the beauty of this island, and the Majorcan people really love their “rock," so there is a collective effort to keep it as sustainable as possible. The more mature areas where tourism started, Magaluf and Arenal, have already changed. The government is working to respond to the massive tourism demand by upgrading hotels. There are many incentives to achieve those upgrades. In terms of construction, there are more restrictions on volumes, building height, and types of property that can be built, while there are numerous areas under high protection. The Tramuntana mountain range is a world heritage site. Primary shoreline plots have many restrictions in place, while rustic areas now have a halved area available for construction. The areas that hold the most potential are those in the interior of the island. In the past, Majorcan people lived in the center of the island, while the coastal areas were left for hotel development. Right now, the potential is for a return to the center. People looking for a sustainable experience would go for country homes and rural hotels. Mallorca cannot compete with other areas in terms of urban or costal hotels, though it does have the best rural hotels. The lack of plots along the coast and the need for more space identified since the pandemic will spur the development of the rural luxury home market as well as homes that are eco-friendlier as well.
MallorcaSite.com has become a reference site for properties on the island. How can the site help map opportunities for investment?
We launched the website because the real estate market was an important sector on the island, though the service that was being provided by large and small players was not adequate for the new clients. That is why we started MallorcaSite.com. The most important thing when arriving in a new destination is to understand what it offers. And Mallorca has many things. There are 22 golf courses, 24 ports, and many international and local schools, and the city is highly cosmopolitan and rich in culture. We have residents from many parts of the world. MallorcaSite.com captures that sense of variety in Mallorca, while being specifically design for foreign investors in Mallorca. The site has a wide variety of properties for sale online. Clients can check online and do their searches, save their properties, and identify their favorites. We have a login offering access to a greater number of properties only available to registered clients. This first contact when considering to invest in Mallorca's real estate is then complemented by our property consultants. We want clients to contact us, and we do customized recommendations for them.
How do you work to support the journey of foreigners investing in Mallorca's property market, and what are some of the main considerations when doing so?
We are experts in finding property. However, when the client does not know exactly what they are looking for, or indeed what the island can offer, we give a first overall idea of what the island is like by area or property type. We first show them the island and the opportunities that exist, including rural properties, areas along the coast, and real estate assets. And where the property exists, a perfect match can be made. If it does not exist, it can be created by our team of collaborators such as architects, interior designers, builders, and so on. These partners are vital in terms of offering a tailor-made service for real estate investors. We are the point of contact on the island for these foreign investors, and our goal is to simplify their experience. We have around 800 properties online, but a number of properties reserved for registered clients are more exclusive in nature.
What is your concluding message on the benefits of investing in Mallorca's real estate?
Mallorca offers a quality of life that one can find in few places in the world. There are many people who want to retire in Mallorca. We are extremely fortunate because we already live in Mallorca. Besides, investing in Mallorca's real estate market is a secure choice. This market has considerable growth potential remaining, and we are here to assist the investor as it always pays to be well advised.