Around six years ago when the Spanish property bubble finally burst and the economy took a nose dive there was wholesale doom and gloom in the country. Here in the Baleares estate agents braced themselves for the worst and before long, the crisis that had consumed the Peninsula began extending icy fingers to our golden shores.
Foreign buyers became jittery as the pound weakened against the euro and local banks stopped offering mortgages while many resident expats feeling the pinch themselves and unable to ride the storm, began putting properties on the market. A few years back in one tiny village alone here in northwest Majorca, nearly 30 traditional terraced properties went on the market at the same time, a buyer’s dream but a nightmare for those desperate to sell.
All the same, while the sale prices of modest terraced homes and apartments decreased, larger properties and señorial mansions and estates across the island seemed to buck the trend. The luxury market continued to attract top foreign buyers particularly those with money to burn but the prices remained stubbornly high. A local estate agent at the time told me that prices for attractive detached properties with three or more bedrooms and land had hardly budged despite the depressed market and that it was the less expensive properties that were suffering most.
Now the National Institute of Statistics and the Spanish Development Ministry have revealed that property prices in the Baleares – unlike the rest of Spain – increased by 4.8 per cent in the third quarter of last year, compared to the same period in 2012, a sure sign that the real estate market in Majorca, Menorca and Ibiza is on the up. On the Spanish mainland the housing market in Navarra, Extremadura and Madrid are also starting to show small signs of recovery which is encouraging for both investors and vendors.
Interestingly in the Baleares foreign ownership of properties has doubled in the last five years and there has been a notable increase in the number of Scandinavians and Russians purchasing properties although German and British buyers still top the list. There is a view that the Spanish government’s recently introduced incentive scheme which offers residency to non-EU nationals purchasing homes of the value of €160,000 or more, has increased interest from foreign investors.
In my local town of Soller, estate agent Dost has reported a marked increase in foreign cash buyers from the UK,Germany and also Scandinavia as well as from the Benelux countries. Barbara Helwig, a local representative, told me that 2013 had been buoyant and that January had already got off to an excellent start with fresh buyers and with prices holding firm. It seems that as far as the Russians are concerned, the very sunny southwest of the island holds most appeal which isn’t surprising given the range of amenities and expat interaction in that part of Majorca.
Aside from its balmy climate, Majorca has an excellent infrastructure, transport links, schools and medical services and is just a two hour hop by plane for many Europeans so one can understand its enduring appeal. Therefore news of steady growth in the property market at the start of the year must be music to the ears of estate agents island-wide. My fingers are crossed that the trend will continue as foreign buyers flock to Majorca in search of their own small slice of paradise.
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