The Spanish statistical office confirmed the third-highest sales nationwide in Mallorca, with a price increase of three percent and more than one third of the buyers being Germans. But what are the reasons behind it and what makes Mallorca so interesting?
The 3,640 square kilometers surrounded by the warm Mediterranean Sea called Mallorca, the largest of the Balearic Islands, is also a sore temptation for property buyers, who mostly come from Germany. According to the Spanish statistical office (INE), a total of 10,605 properties were sold in the Balearics – that’s an increase of 14.6 percent compared to the previous year. With this, the Balearic Islands are ranking third in the list of top property hotspots, placing right behind the Basque country and the Aragón region.
Real Estate Prices in Mallorca
According to relevant property experts and brokers on the island, the winter break never came. The market might be still far off the booming years of 2007/2008, but the trend of owning a property in Mallorca is still holding up and the prices are rising, say insiders. The numbers of the statistical office of the Balearic Islands confirm the gentle price increase of about three per cent, mostly in the south-western area around the capital Palma.
According to the financial management, the average price of all real estate in Mallorca was around 390,000 euros in 2016. All third-party properties were purchased by foreigners, 33.91% of those by German citizens, confirms the association of land registers, Colegio de Registradores.
In second place are buyers from Great Britain with 22.24 percent and more distant the Swedish with 5.83 percent.
Reasons for the Increasing Real Estate Purchase in Mallorca
Real estate located abroad are interesting for many investors. Especially in Spain, buying a small country house or a condominium is fairly easy because there are many professionals accompanying native Germans with their purchase. Another reason are uncertainties forcing capital investors into the real estate market and the low financing costs. And if you want to let your holiday home, you will find many possibilities on the Internet to refinance your investment.
But the activities of the British show just how the Brexit, the withdrawal of Great Britain from the EU, drives investors to buy international real estate. It is not just the weakening pound as a currency, but rather the uncertainty about how difficult it is going to be if one wants to buy from outside the EU as soon as the Brexit is up and running. Analysts believe that the real estate market in Mallorca will experience a “British boom” in 2017 and could even replace the German buyers.
Real Estate in Mallorca as Investment
It is not only the beautiful weather and the Mediterranean Sea tempting you to invest your money. It is the ongoing boom in private tourism which justifies an investment on the Balearic Islands. At a coast of 550 km length, one beach resort follows another and the infrastructure is good. There are even supermarkets like Aldi, Lidl & Co, as well as many German-speaking hairdressers, doctors and service providers.
Just in 2016, 11 million foreigners visited the island in search of recreation and bathing fun. Considering the number of beds of only 290,000 in all hotels and apartments, there is still room for other accommodations. In addition, about 40 per cent of vacationers are from Germany, making a third-party rental easier for native speakers.
But be aware: Real estate financing abroad is more difficult to achieve since the EU’s “Home Real Estate Credit Directive” adopted in 2014 took place. This directive sought to prevent a real estate bubble as back in the USA. For families and people over 50 years of age it is going to be difficult to get a financing for a property in Mallorca, because according to the directive, the property has to be paid off by no later than 65 years of age. In addition, banks are now in liability if they failed to provide sufficient advice.
Tip: When purchasing a property in Mallorcayou should pay close attention to the financing plan and a redemption of up to 65 years. Furthermore, you should make sure to check the entire current and prospective economic financial situation before a bank grants the loan. Always consult a professional who will advise you from the inspection to the purchase.
In conclusion, an international property, especially in Mallorca, is and remains a good alternative to the domestic property. Thanks to the good rentability to vacationers, the good infrastructure and German-speaking consultants and the minor alternatives on the money and equity market, the property is certainly worth checking out internationally.
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