On the 25th April almost 500 participants followed a webinar on the subject of ‘the Mallorca real estate market – launching pad or dead end?’
The discussion took place at the invitation of the local tax specialists European@ccounting and was moderated by the well-known TV journalist Sabine Christiansen. The former current affairs presenter has herself owned a property in Mallorca for some years and decided to spend the Corona lockdown on the island.
Contents
The complete webinar on Youtube
The experts and guests invited to take part were Hans Lenz in his capacity as managing director of the newly-founded international real estate association ABINI, Timo Weibel, managing director of Porta Malllorquina, Lutz Minkner, founder of the real estate agency Minkner & Partner, and Andreas Dinges, managing director of Private Property Mallorca.
Mallorca real estate market – launching pad or dead-end?
The host of the webinar, Willi Plattes, managing director of European@ccounting began by presenting some hard facts. In his opinion the enormous amount of Corona-aid from the ECB will far exceed the supply of funds from the financial crisis, which will result in inflation inevitably having an impact on real estate prices. Willi Plattes expects an increase in the prices:
”You will not notice this inflation during your daily shopping in the supermarket, but it will certainly be noticeable with real estate prices”.
The real estate experts also agreed that Mallorca would remain in demand as a location.
”The number of enquiries we received decreased only slightly, but their quality became very high. Customers know exactly what they want and are just waiting for the time they can come back to the island”,
reports Timo Weibel, an opinion based on his recent practical experience. In fact, most of the on-line audience wanted to know when it would be possible for them to return to the island.
Hans Lenz then confirmed that TUI’s current plans are based around August, and the ABINI association is in dialogue with the island government concerning this. In spite of the desire to revive the real estate business, which makes up around 20 per cent of the gross domestic product of the Balearic Islands, in the shortest possible time all agree that health protection must be the top priority.
The Mallorca real estate experts (l to r), above: Lutz Minkner, Andreas Dinges, Timo Weibel. Below: Hans Lenz, Sabine Christiansen and Willi Plattes.Pictures: Youtube/European@ccounting.
In that respect, as everyone agrees, the Balearic government made excellent use of their island-advantage. Due to the comparatively speedy closure of the harbour and the airport the number of infections was kept very low. Mallorca, however, also had a piece of luck – nobody wants to imagine what would have happened if Corona had broken out in the middle of the Ballermann high-season! The fact that Mallorca post-Corona will different to pre-Corona is agreed by everyone, at least during 2020 when there will surely be no mass-parties or crowded beaches.
”The image of the towns will change”,
Timo Weibel fears. In his opinion the crisis will have the greatest impact on the commercial property market. He is afraid that many shops will have to close and that the vacancy level of office space could increase as, during the lockdown, many companies have recognised the advantages of a home-office working strategy.
Luxury real estate crisis-proof
Lutz Minkner also sees the private holiday home market as being very crisis proof, and particularly in the luxury property segment purchasers are very recession-resistant. He believes that in this segment prices will even rise, a scenario which Andreas Dinges can also well imagine.
He believes that how the situation will effect the middle sector depends upon the length of the crisis. Here there could be possibly be a slump if the unemployment figures were to increase due to an economic collapse. He does not, however, see an effect similar to the Spanish real estate crisis in 2009:
”The interest rate level today is significantly lower than it was then during the financial crisis. Additionally, today there are payment-deferral regulations in place for banks, and compulsory foreclosures are prohibited during times of crisis.”
Lutz Minkner believes that this situation presents a challenge to the politicians. Willi Plattes made the point that, in his opinion, the government should urgently reconsider the property tax regulations. This tax currently brings the Balearic islands around 24 million euros – but has a deterrent effect on solvent investors considering bringing their money to Spain.
The discussion ended after an hour and all agreed that it should be continued in a few weeks.
There is a Plot of land in Majorca that l have my eye on. It has an old building on it would it be possible to live in it permanently once renovated as it appears not all land is allowed to be built on. Is it possible to get a mortgage on land in Majorca. If so what is the deposit that is required and the current interest rate and number of years required in which to to pay off mortgage. I am German and have lived in rented accommodation In Majorca for the past 7 years.