During last year, the city of Palma has experienced an exponential growth of the luxury tourism becoming Europe’s top city in “cosmopolitan tourism”.

This situation was backed up by the opening of new boutique hotels as well as the excellent gastronomic and complementary offers. This can be also extended to the real estate market in the island, especially the luxury sector, that is going through a very good moment these last few years, with a relevant increase both in number of sales and square meter selling price. These circumstances are especially visible in areas such as the centre of Palma and the southwest of Majorca.

When it comes to nationalities, Germans are still leading the investors list on the luxury real estate market, followed by the English and in third place, the Scandinavians, that show a special preference for Palma. Regarding this information, we have to highlight that 93% of the new residents of Palma in 2017 are foreigners. And again Germans stand out in the numbers, choosing to live in Palma and enjoy its quality of life.

All this that has been stated before contributed to a volume of real estate sales in the island last year similar to the numbers registered in 2007, just before the crisis started, when total transactions reached 4,800 millions of euros and last year ended with 4,500 millions.

In fact, real estate experts started to point out the shortness of luxury housing in the island. Especially in the municipalities of Andratx and Calvià, and some neighbourhoods in Palma, such as Santa Catalina or Terreno, where the Scandinavians have invested immensely during the last few years. The demand for this type of product and its shortness in the island is causing that there is now interest in some other areas that some years ago were not exactly attractive for investors but that are now being revalued, like Platja de Palma or Cala Major.

The German client is still the one claiming most of these properties in Mallorca, and it is responsible for 57% of purchases, followed by the British with 16% not allowing the Brexit to hold them back. The Spanish, with the country’s economical recovery, are next with 7%, followed by the 5% of the Swiss and 4% of the Swedes.
If you intend to purchase a property in Majorca from a foreign country like England or Germany, you should consider that both the jurisdiction and the processes to be carried out and the roles of professionals involved in it are different.

Throughout the whole process, the presence of a lawyer is essential to be responsible for providing obligatory advice to clients on legal, tax and legal liabilities acquired during the action of sale.
Ripoll&Mateu can fully assist you in the buying process.

The last real estate market reports show that second-hand housing in the Balearic Islands has had the biggest price increase in the whole of Spain.

In April 2018 the average price was 2,567 euros per square meter. This number had a monthly increase of 5.57% standing out from other regions in the country. Interannually, it increased 12.97% which is also the most relevant increase nationally.

Palma was the regional capital that went up the most from one year to the next, with a 12.28% increase, and an average price of 2,501 per square meter.

At a national level, in April 2018 Spain registered an average price of 1,572 euros per square meter, casting a monthly increase of 1.09%. From last year to this year the increase was 3.01%

The upward trend in the price of housingconfirms the good health of the real estate sector, that also keeps casting positive numbers relating to purchases andmortgages.

We should also take into consideration that the Balearic Islands is the autonomous regionwhere the free housing transactions carried out by foreignershave greater weight. In fact, they represented 40.5% of the total transactions during the last semester of 2017. Moreover, the number of transactions has increased around 5.3% in the Balearic Islands during the same period of time. The average price per square meter for foreigners is 2,888 euros, what implies an increase of 12.1% and that the archipelago is the most expensive autonomous region.

The main reason behind this situation is the investment intentions. Investors prefer lower risk and good profitability. More and more people buy apartments with the intention of renting them out and that results in the increase of both selling and rental prices. To this we have to add the macroeconomic stability that we have since 2013, with the continuous increase of the GDP, which has stimulatedforeign investment. The investors focused on the areas where it is easier to rent: the coast and large cities.

In this sense, the Balearic Islands is the third most expensive autonomous regionin terms of average rental price, with an average monthly rental of 1,522 euros, behind Catalonia (1,603 euros) and only 27 euros below Madrid (1,549 euros). This important increase is known as the “rental boom” and is mostly due to the tensions between supply and demand, among some other factors.

If you intend to purchase a property in Majorca from a foreign country like England or Germany, you should consider that both the jurisdiction and the processes to be carried out and the roles of professionals involved in it are different. Throughout the whole process, the presence of a lawyer is essential to be responsible for providing obligatory advice to clients on legal, tax and legal liabilities acquired during the action of sale.

In Ripoll & Mateu Solicitors Mallorca, we offer our clients a comprehensive service in everything required for the sale of a property.