SHORTCUTS PROPERTY SEARCH
MALLORCA: PROPERTY MARKET NEWS 2007
OVERVIEW
Demand from throughout Europe has maintained Mallorca's growing property market and UK buyers still dominate and lead this growth. Moreover, a recent survey carried out by a major UK agent predicts Mallorca will be Spain's most popular market in 2007.
Average capital growth of 12.8% in 2006 and good rental potential continues to attract buyers from across Europe, combined with the strength of the pound against the euro. Affordable euro mortgages are allowing more and more buyers with equity in their UK properties to invest in second homes.
The island's infrastructure has seen a number of marked improvements in the last year with the motorway from Palma to Andratx being widened at Santa Ponca through to Paguera. Travel time between Puerto Andratx and Palma is now a comfortable 25 minutes. The extension of the motorway north from Palma, bypassing Inca and Campanet and ending at Sa Pobla, has shortened travel time to Pollensa, Puerto Pollensa and Alcudia significantly. This in turn is having a knock on effect on prices and popularity of the north of the island.
The Manacor road has been widened and upgraded with dual carriageway sections and this will open up the North East of the island, whilst the motorway extension going east from the airport by-passes Llucmajor making travel time to the east coast resorts much improved. Property prices in the South East are likely to increase as local facilities develop, but are still offering good value for Mallorca.
A new look to Palma's sea front is well down the planning road, with a new convention centre taking centre stage of a '40 million regeneration project at the eastern end of the Paseo Maritimo, close to the fashionable marina of Portixol and opposite Palma's main beach. The renovation of the Born is now complete, with new underground parking which has improved convenience for residents and visitors.
Improving marina facilities throughout the island, continual restoration projects in the countryside to maintain historic buildings and walls make Mallorca one of the Mediterranean's most sought after places to own property. Mallorca's foreign community - one of the largest in Spain - continues to thrive. Tourism is the mainstay of the island along with property and is continuing to become more diverse and upmarket. There are now many more five star hotels and with 23 UK and 21 German airports providing flights to Palma, the island's convenient location and popularity looks unlikely to diminish in the foreseeable future.
PALMA
The island's political and cultural capital is where 40% of Mallorca's population lives and enjoys an average daily temperature of 21.4 degrees and 7 hours of sunshine per day throughout the year. It is the largest medieval old town in Europe with numerous famous buildings, fashionable shops, narrow streets, tapas bars and enough restaurants to satisfy everyone's palate. It is dominated by the Gaudi influenced Cathedral and an eclectic mix of art galleries from the contemporary Es Baluard to the historic Palau March.
Open plazas and avenidas give way to waterfront marinas lined with super yachts. There are two yacht clubs, including the largest and most prestigious on the island, which hosts the Copa d'el Rei each year. The Spanish Royal Family holiday each August on the island at their summer palace, Marivent, on the outskirts of the city and regularly compete in several regattas.
Property demand in Palma is primarily for older refurbished buildings, particularly around the Cathedral area of Calatrava and the areas of La Llonja and Santa Catalina. Many of the city's old palaces and villas are currently being totally renovated with the addition of lifts and modern facilities. The faded areas of Portixol and Terreno are also being rediscovered and gentrified ? Portixiol in particular is now a very fashionable and chic area. Foreign buyers in particular are looking for property which offers outside living in the form of lofts, penthouses and courtyards and these inevitably command premium prices.
Santa Catalina:
This old fisherman's neighbourhood has become a lively restaurant area with its popular market at its center. It is a barrio (district) that borders the contemporary art museum of Es Baluard and the waterfront of the Paseo Maritimo. Prices range from '2000 to '3500 per m2.
Calatrava:
The historical heart of Palma surrounds the Cathedral and includes the notable churches of Santa Eulalia and San Francisco. Calatrava consists of quiet narrow streets of historical buildings with restricted access and parking. It is a very sought after area therefore prices range from '3,500 to '7,000 per m2.
La Llonja:
This barrio borders the Born on its eastern side and the Paseo Maritimo and up to Es Baluard, the contemporary art museum. It is also a lively area with restaurants and bars particularly around Plaça La Llonja itself. A number of small and exclusive boutique hotels have opened in this area attracting a fashionable following. Prices range from '3,500 to '5,500 m2.
Portixol/ Es Molinar:
Portixol has a small marina, beach and a wide sea front promenade and has become an expensive and chic area. Slightly further along the coast Es Molinar and Cuidad Jardin offer a less expensive alternative. The planned '40 million redevelopment of the sea front at the eastern end of the Paseo Maritimo where the access road to Portixol and Es Molinar is located will ensure the area will maintain its prices at '3,000 to '6,000 m2.
Son Vida:
Palma's most exclusive residential area has two superb golf courses and two five star hotels. It has spectacular views of Palma and the bay and offers its residents privacy and security, which gives Son Vida an imposing air. Easy access to Palma and the airport make it a perfect location for many buyers. There is strong demand for both existing and new build property here with property starting at '1.5million.
SOUTH WEST MALLORCA
As you leave Palma heading west towards Andratx, you pass the village of Genova with its numerous restaurants and approach the areas of Bendinat, Costa D?en Blanes and Portals Nous with its lively marina of Puerto Portals and some of Mallorca's most exclusive eating and shopping.
Real estate here is of a high standard with several urbanisations developed around the Bendinat golf course. The tunnel link of Bendinat to the main Palma/Andratx motorway has made Palma only 10 minutes away and further served to emphasise this area as a prime location for both permanent and holiday residence.
Apartment prices can go beyond '4,500 per m2, but these are well constructed and managed, and have top quality finishes. Old Bendinat has a number of exclusive frontline residences with direct sea access which change hands for over '6,000,000.
The marina of Puerto Portals with its renowned restaurants, bars and exclusive shops attracts an international group of people all year round. The proximity of several golf courses, excellent sailing and a wealth of sports activities make this a very sought after location. There are many apartments that overlook the marina that vary considerably in price, and can represent good investment with refurbishment potential. Overlooking Portals Nous and Puerto Portals is the urbanisation of Costa d'en Blanes where sea view villas command '1.3m million plus.
Moving further west along the coast Santa Ponsa is set in beautiful coastal countryside and surrounded by three golf courses. The large urbanisation of Nova Santa Ponsa has been carefully planned to avoid high density building with surrounding green areas and protected green zones. Port Adriano just along the coast is an interesting area to watch ? permissions has been granted for the expansion of the marina to create berths for super yachts. This will undoubtedly mean more restaurants, facilities and of course, higher property prices.
Beyond Santa Ponsa is Camp de Mar, with a golf course, five star hotel and celebrity residents, along with a number of quality developments. This is an area that has tremendous potential and character and very much complements Andratx and Puerto Andratx, which are just around the bay. In fact, Andratx must rank as one of the most popular locations in the South West and consequently is one of the highest priced regions. The slopes of the hills surrounding Puerto Andratx are home to many exclusive villas, mansions and apartments enjoying spectacular views to the sea, marina and mountains.
A popular yachting port, Puerto Andratx is a working harbour with a flourishing fishing fleet, which adds great charm and character. There are a number of locations around Andratx, including La Mola, Montport, Cala Marmacen and Cala Llamp. There are also exclusive apartment developments with cliff top sea views where prices currently range from '4,500 to '5,000 m2 depending on location and outlook. Sea view villas start at around the '1.8m mark. Building land is rapidly becoming hard to find and as building slows down in the future, demand will increase as supply consequently reduces.
Moving inland there are the villages of Es Capdella and Calvia that enjoy the proximity of the coast and Palma, but without the tourism that coastal locations tend to attract. Fincas and village houses in these areas carry a certain premium as the locations are in high demand from both the foreign and domestic markets.
NORTH WEST COAST AND THE NORTH:
Those buyers in search of a more rural and traditional side of Mallorca with the most dramatic landscape often gravitate to the north west and north of the island. Dominated by the Tramuntana mountain range stretching from Andratx in the south to Pollensa in the north, the villages of Deia, Valldemossa, Soller, Puerto Soller and Fornalutx will come high on the list of interesting locations to consider.
The protected area of the Tramuntana mountains has meant that new properties are rare and demand for existing fincas and village houses are strong. The most notable changes unfolding in the North West are in Puerto Soller which is undergoing a face lift as a new tunnel will shortly re-route traffic away from the harbour allowing the promenade to become pedestrianised and the beach improved. New hotels and restaurants are beginning to spearhead the port's renaissance and two and three bedroomed village and edge of village properties are commanding prices of '480,000 plus. Traditional stone faced fincas can be found for '630,000 whilst renovated fincas with sea views are on the market for '1.3m plus.
Continuing up along the west coast are the peaceful towns of Pollenςa, Puerto Pollenςa, Formentor and Alcudia. The property market in this area is dynamic and has long been popular with the British market. Village houses, modern apartments and fincas are all in high demand and the extension of the motorway from Palma, which now by-passes Inca, has significantly shortened drive times from the airport and Palma.
The town of Pollenςa with its famous Monte Calvario steps is a much-desired location now the refurbished village square is cut off from traffic. The town boasts a number of musical and art festivals during the year and its growing number of restaurants and galleries give it an artistic atmosphere. It is a lovely place to relax and watch life pass by.
In the Pollensa area there are a number of fincas with land of twenty hectares or more. The valleys of Vall d'en March, Vall de Colonia and Vall de Can Aixartell are sought after for their idyllic locations and mountain views ? yet within a few minutes of beaches and the town. A new luxury villa development overlooks the Pollensa golf course.
Another area of interest is the villa urbanisation of La Font, close to Pollenςa. It sits on a hill and the beaches of Cala San Vicente and Puerto Pollensa are just minutes away. Apartments tend to be concentrated on Puerto Pollensa and vary considerably. Newly built apartments are from around '450,000 with communal gardens and pool.
The second phase of the Puerto Pollensa ring road is scheduled to open in the summer of 2008. This new road will divert traffic heading for Alcudia away from the sea front to the east of the marina. This will reduce the congestion in the main town centre and along the promenade.
Alcudia has a number of popular urbanisations: including the recently modernised Bon Aire, Mal Pas and Baccares overlooking Pollensa Bay. The small yacht haven of Puerto Cocodrillo is interesting near the golf course with views over the sea in Aucanada. Finally, the exclusive Formentor area is showing activity with houses that have not moved for decades coming onto the market. The natural landscape with white sandy beaches gives this spectacular peninsular a great deal of charm.
The North of the island becomes considerably quieter as tourism slows after the end of summer. Palma and the South West enjoy more of an all year round tourist business, but certain parts of the island do go into hibernation as many restaurants and bars close in the predominately tourist resorts of Puerto Pollensa and Alcudia.
OTHER COASTAL AREAS:
The North East and Eastern coastline is predicted to see the most change in the foreseeable future as improved infrastructure has meant they are more accessible and new development in the South West slows. The improved Palma to Manacor road will make the villages of Arta and Capdepera and the residential areas of Costa de Canyamel and Costa de los Pinos, located between beautiful mountains and beaches in the north east, easier to get to and therefore more popular.
Prices are more reasonable and if you appreciate open spaces, stunning scenery and sandy beaches and are happy to be an hour from the airport, then this area can be a good place to explore.
Those wishing to experience Mallorca away from mass tourism will quickly feel at home in this part of the island. The main towns of Manacor, Felanitx, Santanyi and Campos offer shopping, culture and many highly regarded restaurants. The Vall D?or golf course and marinas of Cala D?or, Porto Petro, Porto Colom and Porto Cristo serve the international public with a variety of leisure activities.
The surrounding areas of Vall D?or, Cas Concos, Calonge, S?Horta, Es Caritxo and S?Alqueria Blanca offer many quality-reformed fincas. The best locations offer proximity to golf, sea views and natural peace and quiet all rolled into one and attract high spending clients seeking privacy and seclusion. Property prices range from '200,000 to '4 million plus. Land is increasingly difficult to find and areas north east of these villages are taking over.
INLAND AREAS:
Villages within a twenty minute drive of Palma form a sort of rustic belt that surrounds the cities outskirts. Buyers wanting a more rural country feel but easy access to Palma, golf and of course the sea, will search here.
Establiments, Puigpunyent, Santa Maria, Alaro, Bunyola and Binissalem are poular village locations as are Sencelles and Santa Eugenia. Llucmajor to the east of Palma now by-passed by the improved PM602 and is beginning to see property prices rise. Heading north, the extended Inca motorway is putting the villages of Campanet, Buger, Sa Pobla and Muro more firmly on the property buyers' map as journey times are reduced.
Prices for older properties in need of renovation in these areas ? which had been neglected for years - are being driven up as availability reduces.
LOOKING FORWARD:
The Valuation Society has forecast that during 2007 the increase in the property values will continue. The average price of rural land in Mallorca is the third most expensive in Spain behind Valencia and the Canaries.
Direct investment in Spanish property per se has become more tax efficient this year as the Spanish Government cut Capital Gains Tax on property sales and personal income for non-residents from 35% to 18%. This will certainly make property even more attractive for commuters looking for homes in Palma and the South West of Mallorca and UK buyers looking to relocate on a permanent basis.
The withholding tax (part of the CGT) provision that non-residents pay on completion of a property sale has also been reduced from 5% to 3%.
Spain also remains the second most popular destination after Australia for almost 200,000 British nationals who moved abroad last year and in the next five years, over one million are expected to relocate.
Mallorca has a major nautical sector and is a hub for super yachts in the Mediterranean. The island is planning to expand eight of its thirty two harbours and marinas and this is spearheaded by the '40million expansion of Port Adriano near Santa Ponsa and Sol de Mallorca and the planned redevelopment of Palma's seafront at its eastern end. Sea view and frontline properties will remain excellent investments as the authorities tighten up controls which are already stringent.
Plots for construction particularly in the South West are in very short supply and there are fewer developments in construction than in previous years, reducing the choice of off-plan purchase. The cost of building smaller communities is also driving costs up.
Unlike other parts of Spain, where speculative building has led to over supply, the Mallorcan market is more robust and in certain sectors there will be a distinct lack of product going forward into 2007.
