Mallorca's property market is booming and there appears to be no end in sight for 2017; quite the contrary in fact. The same applies to prices. For the second year in a row, property prices on the island are on the up and fast-approaching the level of the 2006 and 2007 boom years. The global political situation and the excellent accessibility from Germany continue to make the island a hotspot for property buyers. Naturally the mild climate plays a role too; with more than 300 days of sunshine each year being a major selling point.
The Mallorcan property market benefits from tourism in a way that is almost unparalleled elsewhere. Last year 12.9 million tourists visited the island up to November alone, which set a new record. This represents a tangible benefit for property owners if they are able to use their property for holiday rentals. The government of the Balearic Islands has announced a liberalisation of the tourist holiday rental trade, even though most hoteliers are opposed to the measure. Proponents of the change, however, are of the opinion a sophisticated tourist who rents a high-quality holiday property spends more money on the island than a hotel guest. In future, there will therefore be more opportunities for legal holiday rentals. This fact is having an effect on property prices and is a factor in the calculation, regardless of whether the buyer uses the property for holiday rental or not. Since tourist numbers in Mallorca are expected to reach record levels again this year, the property price trend remains at a very high level.
The exit of Great Britain from the EU, which many had feared and which was indeed decided, has left its mark on Mallorca to the extent that even before the referendum, British buyers were exercising caution. However, that did not affect the luxury segment. "Investors in high-priced properties are not affected by threats of recession“, says Luis Heymann, Managing Director of the Finest Selection Group in Palma. The mood among buyers of luxury property remains undamped in the face of Brexit, even among British clients.
A significant political decision in one country can no longer affect the luxury property market in Mallorca as much as before, and there is good reason for that. Thanks to the steady advance of internationalisation, the demand for high quality Mallorca property continues to rise amongst a wide array of overseas clients. While it used to be the case that the Germans and British were the only relevant buyers, nowadays potential clients from Sweden, Switzerland and France as well as Russia, America and even China are increasingly likely to look for luxury property on the island. The so-called Golden Visa is a factor in this change. The Spanish government guarantees non-EU citizens permanent right of residence if they buy a property worth 500,000 Euros or more. An island with such a high density of exclusive properties as Mallorca naturally profits particularly well from this arrangement. Mallorca has become a highly interesting investment location for property buyers worldwide. The globalisation of the property market plays a major role in the fact that investments are steadily rising in value, as Mallorca's property is becoming less and less dependent on the economic situation of individual countries. Investing in luxury property in Mallorca is therefore still a very worthwhile prospect in 2017.
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