Home » Latest market report shows Mallorca is ‘safe as houses’ for property investors

Latest market report shows Mallorca is ‘safe as houses’ for property investors

The key facts of the latest Engel & Völkers Mallorca market report underline the perennial safety and security of the island as a long-term property investment. If the saying ‘safe as houses’ applies anywhere, it’s Majorca.

2021 was close to a record year for the property market in Mallorca (Majorca), despite supply constraints that prevented the market from reaching its full potential. Market turnover rose 81% to 6.6 billion euros on the back of an increase in house prices, and a surge in foreign demand that took the market share of international buyers to 40%.

A record year just after a global pandemic? If you look back at home sales and house prices in Mallorca over the last two decades, you see a remarkably safe housing market that brushed off the financial crisis and pandemic alike.

According to figures from the Spanish notaries’ association, sales fell in both the crisis and pandemic, but prices only adjusted downwards for a few years during the financial crisis before recovering strongly from 2014 onwards, and even increased by close to 7% during the pandemic year of 2020.

Depending on the data source, Balearic house prices are now between 18% and 60% above the peak before the financial crises, whilst for Spain as a whole prices are still 3% below the peak of 2007, according to figures from the Land Registrars’ association. Investors in some other parts of Spain are still sitting on negative equity, but not in Mallorca.

This shows that property in Mallorca has been a remarkably reliable investment offering both unbeatable utility-value and wealth-protection for long-term investors who have seen their capital increase over the years as they enjoyed using and renting their home in Mallorca.

Land scarcity in Mallorca

The biggest problem holding back the market in Mallorca today is the scarcity of building land and new homes for sale leading to frustrated demand. But, on the other hand, land constraints mean the property market in Mallorca is never at risk of oversupply, which protects the value of real estate on the island.

new developments for sale in Mallorca
APM Suites – a small exclusive residential complex of four high-quality new apartments with sea views currently for sale with Engel & Völkers Mallorca. Click image for more info.

Along with its world-renowned quality of life, and healthy coastal environment, Mallorca’s demonstrably low investment-risk over the medium to long-term has helped fuel the strong demand for homes on the island we currently see with both local and international investors.

“Due to low interest rates and, at the same time, rising inflation, it has become important for many people to invest their money securely on a long-term basis,” explains the Managing Director of Engel & Völkers Balearics, Florian Hofer. “Properties in the Balearics have proven to be extremely stable investments, having experienced significant appreciation over the past decade: since 2012, the team at Engel & Völkers has processed around 3,400 transactions, with an average annual increase in value of around 9%.”

With growing local and international demand boosted by the lifestyle changes people have made in response to the pandemic, and a chronic shortage of land and homes for sale on the island, we forecast that prices will continue to rise in Mallorca, and the island will continue to be a safe haven for property investors.

Property in Majorca appeals to the post-pandemic lifestyle

To get detailed insight into the market, read the latest report to understand the powerful trends that are cementing Mallorca’s reputation as a leading upmarket holiday and expat destination in Europe, including Palma’s transformation into a cosmopolitan city with an extraordinarily rich variety of lifestyle attractions, and the island’s drive towards a green and sustainable tourism sector supported by regional and EU investments.

Is this the ideal time to buy a property in Mallorca? Does Mallorca have an infrastructure for all-year round living? Where are the most desirable regions, and how much does property cost there? In the Engel & Völkers Market Report Mallorca 2021/22, you will find the answers to these questions and many more. Download the report here.

“Whether you are searching for a traditional finca in the tranquil centre of the island, an apartment in Palma, or a luxury villa with a sea view in Son Vida, we are ready to offer you our services as a reliable partner whenever you need us,” says Florian.

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
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