Mallorca yesterday and today
Majorca is not only the most famous of the Balearic Islands, but also the largest in the country. In addition, it ranks second in terms of population, second only to Tenerife in the Canary Islands. It has a very rich history: at first the island belonged to Carthage, after the fall of which it became a pirate base, and then it was conquered by the Romans. Then a period of prosperity began here, olives began to be grown on the territory, salt was mined and vineyards were cultivated. During this period, the cities of Pollentia and Palmaria (Palma de Mallorca) were founded. Later, Mallorca became part of Byzantium, then it was conquered by the Cordoba Caliphate and Muslims from North Africa, and in the 13th century it became part of the Spanish kingdom of Aragon. In the 18th century, Mallorca became part of the British colony. The active development of tourism here began in the middle of the 20th century, which intensified even more in the new millennium.
Mallorca is divided into six districts (comarocs): Palma, Pla de Mallorca, Sierra de Tramontana, Raiger, Migjorn and Llevant. Over the past few decades, Mallorca has gained worldwide fame for its luxurious seaside resorts, secluded coves, limestone mountains, and Roman and Moorish architectural monuments.
Mallorca is an island that attracts both young people and families with children and respectable people of the age. Excellent infrastructure, a developed healthcare system and a high standard of living have made it a favorite place for the main or second home, as well as for summer cottages by the sea.
Mallorca real estate market
Mallorca is interesting because the world and Spanish crises practically do not affect this island. This can be explained both by its exclusivity and privileged location, and by the enduring international demand for high-quality real estate in a picturesque setting with respectable neighbors. The persistently high demand and rise in prices are also influenced by severe restrictions in construction, especially with regard to the limitation of the building area. Interestingly, unlike the Cote d’Azur and the Spanish mainland, real estate on this island is still not so popular among our compatriots – the British, Germans and Scandinavians still prevail here.
Consequences of the pandemic on the real estate market in Mallorca
In the summer and fall of 2021, the volume of real estate sales and purchases in Mallorca tripled compared to the usual pre-pandemic levels. There are many reasons for this, but the main ones are massive capital investment in the most inflation-resistant real estate in Europe. In Mallorca, even during the financial crises, prices did not fall, but the number of transactions only decreased. The second very compelling reason for the high demand for housing on the island was the successful policy of the ballerina government to combat the coronavirus pandemic. Here, large restrictions were avoided, and the number of hospitalizations remained at a low level. Thanks to this, life in Mallorca has practically not changed: you can swim in the sea, sunbathe in the sun, freely visit shops, restaurants, cultural events, schools here work as usual, the only difference from a normal situation is the need to use masks.
Real estate in Palma and in the south-west of the island is still in very high demand – in the most popular places in these locations, it can exceed the supply at times. Over the past year, almost all real estate has been sold out, even the one that, due to the overpriced, remained on the market for years. As a result of such an unprecedented demand, prices rose again, and due to the lack of large supply, almost all parts of the island began to be in demand.
Also, a distinctive feature of the current situation on the real estate market in Mallorca is the presence of a huge capital of international investment funds, which buy many houses, residential complexes, hotels and other buildings on the island. One-time transactions with impressive capital are also carried out here – for example, the purchase of the Punta Negra hotel for 80 million euros.
It should be noted that mainly foreigners buy real estate in Mallorca, among whom about 65% are Germans. The market is still divided into two parts. The first is luxury real estate in the form of villas, mansions and apartments, which are in demand from foreign buyers, and more standard housing, which is mainly purchased by local residents.
On average, an apartment in the south-west of Mallorca with a total area of 150 square meters costs about 650,000 euros. But it is worth noting that there is practically no supply here either. This means that, most likely, such objects will soon cost even more. Resale villas are almost impossible to find for less than € 1.2 million. And in this case, we will talk about an object without a sea view and in a condition that is likely to require repair. New villas in Mallorca cost from 3.5 million euros, but if there is a sea view, the price will start from 4.5 million euros. In Palma, luxury apartments with an area of 150 square meters cost from 500,000 euros in less demanded areas and from 1.5 million euros in more demanded areas.
Thank you for your help in preparing the material:
Lolu Hammeke, owner of Mallorca Dream Living
Evgeniya Antipova, managing partner of Albamar Group