Mallorca still top of the list for German purchasers
As strange or inappropriate as it might read, the present financial situation in which Europe and particularly Spain is wrestling with - is one side of the coin. On the other side, the more positive side and relating to the property market in Mallorca, is unquestionably the lure of the sun and Mediterranean lifestyle. Secondly, we are hearing an old adage our parents would have quoted on several occasions during their lifetime -
"as safe as bricks and mortar".
Therefore with that thought in mind it has added a third dimension to purchasing property in Mallorca. That extra consideration is placing one's cash into the safe haven of something physical, something you control, can enjoy or rent. In addition to First Mallorca's very active long term rental division, the company is offering `buy to let´ relating to new deluxe properties in Puerto de Andratx producing a return of up to 4.3% at prices starting from 375,000 € for a 120m2 2 bedroom 2 bathroom apartment with garage and superb community facilities; see reference 52832 http://www.firstmallorca.com/en/property/52832
Of late the most asked question of course refers to the health of the Mallorca property investment. Clearly the most relevant fact to understand is that one must not confuse the property market of mainland Spain to the situation of Mallorca. It is related only by being under the umbrella of association.
Mallorca is an individual product and has never been building developments in excess of demand. Mainland Spain on the other hand constructed massive blocks of characterless apartments along its coastline, relying on unsecured bank loans based on pure speculation rather than intelligent market research. Even during the 2005-08 construction period the old 'hard sell' philosophy and lack of pleasing architecture was wearing thin. In many cases the property purchase agent quoted a monthly mortgage rate rather than the selling price. For several considerations that development policy was seriously flawed (we wrote about it as long ago as 2006). The mismanagement of many Spanish banks' mortgage departments is now well documented.
To stimulate the market, the Spanish Government has introduced two tax incentives. Applicable to purchases during the remainder of 2012 the Capital Gains Tax when re-selling will be subject to a 50% reduction. No date limit on when the property is sold. In addition, the VAT on purchases of new properties is currently reduced to 4% from the original 8%.
However, prior and therefore unrelated to these Government incentives, the period following the 2011 Christmas holiday First Mallorca enjoyed both a record number of daily website visits and an increased number of enquiries compared to the previous year. As a result property viewings showed increased activity and have continued at a very satisfactory pace to date.
Clearly the lure of the warm Mediterranean sun and lifestyle is not to be underestimated even in a depressed European economy.
Our results from January 1st to May 31st 2012:
Value of Property Transactions: 42,983,370 €
Number of Sales: 50
Average Property Price: 859,667 €
Average Negotiation Margin: 11.49%
Most Valuable Property Sold: 4,200,000 €
Most Affordable Property Sold: 80,000 €
NATIONALITIES OF PURCHASERS
NATIONALITIES OF VENDORS