No drop in prices for good locations in Majorca
Although the Spanish real estate market was unable to halt its downward trend in 2012, with losses of 10% according to the Spanish Statistical Office, INE, the number of properties sold in the Balearics in 2012 remained stable, with 7,850 transactions (excluding social housing). However, looking at the development of sales figures since 2007, we see that the real estate market in the Balearics has also dwindled to a fraction of its original volume.
Source: INE 2013; chart: www.porta-mallorquina.com
Jessica Jaeger, Managing Director of Porta Mallorquina Real Estate – one of the island’s biggest estate agencies – explains this development:
“When the real estate crisis broke out in 2008, the market was “paralysed with shock”. Everyone was waiting for the rush to offload properties in Majorca, but the big drop in prices didn’t happen.”
What remained were buyers waiting for the right moment, and confused owners who preferred to withdraw their properties from the market rather than sell them under value.
The market has meanwhile calmed down, and prices for good locations have stabilised.
“The enormous price increases that Majorca experienced at the beginning of the new millennium are a thing of the past. Prices for attractive holiday properties have remained virtually unchanged since 2008. This means that buyers can now expect to make a stable investment,”
Jessica Jaeger says.
With a portfolio of 1,600 to 1,800 properties, Porta Mallorquina recorded a drop in prices for less than 5% of properties during the period from 2010 to 2012. Jessica Jaeger says this is because of the way that properties are selected for the portfolio: “Overall, our holiday properties stand apart because they are well built, and in attractive locations, which is why only selective price adjustments have been made.” Natascha Sandig from Porta Ibiza can confirm the same for the neighbouring island where prices as a whole are higher.
November was best month for sales
In year-on-year comparison, 2012 proved to be essentially stable, with sales figures making significant gains once again, particularly during Q4. Jessica Jaeger says that this was because of the removal of numerous tax benefits for property vendors and buyers which were abolished by the Spanish government for 2013.
Good start for 2013
The experts have meanwhile become cautious about making forecasts. They can still all too clearly remember 2010, when it was believed that the crisis was already over. In the Balearics, the Porta Mondial partners have registered a renewed increase in demand during the first six weeks, and sales figures for 2013 are also currently up on the previous year.
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Source: INE 2013; chart: www.porta-mallorquina.com