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Mallorca real estate market 2024: What can be expected?

Mallorca real estate market 2024: What can be expected?

Global circumstances are holding up the real estate market worldwide. With ongoing wars and increased interest rates, there’s no denying that primary markets are facing challenging times. Luxury property in Mallorca, however, continues to be in high demand, despite feeling the impact on some level.

Some prime property in the best locations are remaining in brokers' portfolios for longer than before, as are some new builds and renovation projects waiting around in developers’ drawers. However, this current situation does present opportunities, with a slightly decreased demand since the second quarter of 2023, there are certainly better grounds for negotiation than in previous boom years. Plus, the latest wealth tax cut has been good news for buyers and the real estate sector.

It should also be noted that in the historical context, interest rates are not exceptionally high, but rather it’s the long “zero interest rate phase” which is a unique case in history. Nevertheless, property prices in Mallorcan hot spots have continued to rise, especially over the last three years, which has increased in the double-digit percentage range over the years, annually. The reason for this isn’t just high demand, but primarily the shortage of land to build on along with the additional costs for building materials and high-quality construction and equipment found in premium new builds, which have become standard on the island. 

Will house prices fall in 2024? It’s unlikely in good locations. This is already evident in the price increases over the last decades. Even in times of crisis, prices have always remained at the same level on the Island, especially in the sought-after areas of Palma and practically the entire southwest, all of which have remained stable. Regions in the north, along the coast, and now also the Tramuntana Mountains region are considered solid real estate investment locations too. Additionally, a new, financially strong buyer group from the USA and the Emirates is increasingly choosing to invest in Mallorca, which is in part reflected by the new direct flight connections from these destinations and also the Golden Visa benefits.

Mallorca is and remains one of the most attractive real estate investment locations in Europe.

Anyone who is able to purchase their dream property through good negotiations now will see a growth in value despite higher mortgage costs. This is due to the positive price trend that is expected to continue as well as the belief that interest rates will likely fall in the medium term (according to the expectations of most experts). The most important factor in stable prices and steady growth in value remains the high standard of living on the island: high security, modern infrastructure and optimal year-round flight connections available throughout Europe, which are incomparable to anywhere else.

We advise you on all aspects of real estate acquisition in Mallorca and will handpick a selection of properties that meet your high requirements and individual specifications, so that your investment in Mallorca can yield a solid increase in value in the future.

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