Mallorca Property Market Update 2008

Demand for property from throughout Europe continued throughout 2007, and most property professionals on the island reported steady interest and sales, with increased activity at the upper end of the market especially. Prices continue to rise, although at a reduced pace, as sellers are being more realistic in their asking prices.Improving marina facilities throughout the island, continual restoration projects in the countryside to maintain historic buildings and walls make Mallorca one of the Mediterranean’s most sought after places to own property. Mallorca’s foreign community – one of the largest in Spain – continues to thrive.

A number of small and exclusive boutique hotels have opened in this area attracting a fashionable following

Tourism is the mainstay of the island along with property and is continuing to become more diverse and upmarket, attracting visitors from all over the world. There are now many more five star hotels and with 24 UK and 21 German airports providing flights to Palma, the island’s convenient location and popularity looks unlikely to diminish in the foreseeable future.PALMAThe island’s political and cultural capital is where 40% of Mallorca’s population lives and enjoys an average daily temperature of 21.4 degrees and 7 hours of sunshine per day throughout the year. It is the largest medieval old town in Europe with numerous famous buildings, fashionable shops, narrow streets, tapas bars and enough restaurants to satisfy everyone’s palate. It is dominated by the Gaudi influenced Cathedral and an eclectic mix of art galleries from the contemporary Es Baluard to the historic Palau March.Open plazas and avenidas give way to waterfront marinas lined with super yachts.

The Vall D’or golf course and marinas of Cala D’or, Porto Petro, Porto Colom and Porto Cristo also have a variety of leisure activities

There are two yacht clubs, including the largest and most prestigious on the island, which hosts the Copa d’el Rei each year. The Spanish Royal family holiday each August on the island at their summer palace on the outskirts of the city and regularly compete in several regattas.A new look to Palma’s sea front has begun, with a new convention centre taking centre stage of a EUR40+ million regeneration project at the eastern end of the Paseo Maritimo, close to the fashionable marina of Portixol and opposite Palma’s main beach. It will become a major business destination, offering an auditorium, conference halls as well as a new five star hotel, cafes, gym, restaurants and bars.Shortcuts Property Search report property demand in Palma is primarily for older refurbished buildings, particularly around the Cathedral area of Calatrava and the areas of La Llonja and Santa Catalina. Many of the city’s old palaces and villas are currently being totally renovated with the addition of lifts and modern facilities.

Land is increasingly difficult to find and areas north east of these villages are taking over

The faded areas of Portixol and Terreno are also being rediscovered and gentrified – Portixiol is now a very fashionable and chic area. Foreign buyers in particular are looking for property which offers good outside living in the form of lofts, penthouses and courtyards and these inevitably command premium prices.Santa CatalinaThis old fisherman’s neighbourhood has become a lively restaurant area with its popular market at its centre. It is a district that borders the contemporary art museum of Es Baluard and the waterfront of the Paseo Maritimo. Prices range from EUR2,000 to EUR3,500 per m2.CalatravaThe historical heart of Palma surrounds the Cathedral and includes the notable churches of Santa Eulalia and San Francisco. Calatrava consists of quiet narrow streets of historical buildings with restricted access and parking. Prices range from EUR4,000 to EUR9,000 per m2.La LlonjaThis quarter borders the Born on its eastern side and the Paseo Maritimo and up to Es Baluard, the contemporary art museum. It is also a lively area with restaurants and bars particularly around Plaça La Llonja itself. A number of small and exclusive boutique hotels have opened in this area attracting a fashionable following. Prices range from EUR3,500m2.Portixol/ Es MolinarPortixol has a small marina, beach and a wide sea front promenade and has become an expensive and chic area. Slightly further along the coast Es Molinar and Cuidad Jardin offer a less expensive alternative. The planned redevelopment of the sea front at the eastern end of the Paseo Maritimo where the access road to Portixol and Es Molinar is located will ensure the area will maintain prices of EUR3,000 m2 and upwards.Son VidaPalma’s most exclusive residential area has two superb golf courses and two five star hotels. It has spectacular views of Palma and the bay and offers its residents privacy and security, which gives Son Vida an imposing air. Easy access to Palma and the airport make it a perfect location for many buyers. There is strong demand for both existing and new build property here with property starting at EUR1.5million.SOUTH WEST MALLORCAAs you leave Palma heading west towards Andratx, you pass the village of Genova with its numerous restaurants and approach the areas of Bendinat, Costa D’en Blanes and Portals Nous with its lively marina of Puerto Portals and some of Mallorca’s most exclusive eating and shopping.Real estate here is of a high standard with several urbanisations developed around the Bendinat golf course and Shortcuts Property Search report constant interest in this area. The tunnel link of Bendinat to the main Palma/Andratx motorway has made Palma only 10 minutes away and further served to emphasise this area as a prime location for both permanent and holiday residence.Apartment prices can go beyond EUR4,500 per m2, but these are well constructed and managed, and have top quality finishes. Old Bendinat has a number of exclusive frontline residences with direct sea access which change hands for well over EUR6,000,000.The marina of Puerto Portals with its renowned restaurants, bars and exclusive shops attracts an international group of people all year round. The proximity of several golf courses, excellent sailing and a wealth of sports activities make this a very sought after location. There are many apartments that overlook the marina that vary considerably in price, and can represent good investment with refurbishment potential. Overlooking Portals Nous and Puerto Portals is the urbanisation of Costa d’en Blanes where sea view villas command upwards of EUR1.3m million.Moving further west along the coast, Santa Ponsa is set in beautiful coastal countryside and surrounded by three golf courses. The large urbanisation of Nova Santa Ponsa has been carefully planned to avoid high density building with surrounding green areas and protected green zones. Port Adriano just along the coast is an interesting area to watch – work has started on the improvement of the marina to create berths for super yachts. The expansion design is being led by Phillipe Starck. This will undoubtedly mean more restaurants, facilities and of course, higher property prices.Beyond Santa Ponsa is Camp de Mar, with a golf course and five star hotel, along with a number of quality developments. This is an area which complements Andratx and Puerto Andratx, just around the bay. In fact, Puerto Andratx must rank as one of the most popular locations in the South West and consequently is one of the highest priced regions. The slopes of the hills surrounding Puerto Andratx are home to many exclusive villas, mansions and apartments, many with spectacular views to the sea, marina and mountains.A popular yachting port, Puerto Andratx is a working harbour with a flourishing fishing fleet, which adds great charm and character. There are a number of locations around Andratx, including La Mola, Montport, Cala Marmacen and Cala Llamp. There are also exclusive apartment developments with cliff top sea views where prices currently range from EUR4,500 to EUR6,000 m2 depending on location and outlook. Sea view villas start at around the EUR1.8m mark. Building land is rapidly becoming hard to find and as building slows down in the future, supply will be further reduced.Moving inland the villages of Es Capdella and Calvia enjoy the proximity of the coast and Palma, but without the tourism that coastal locations tend to attract. Fincas and village houses in these areas carry a certain premium as the locations are in high demand from both the foreign and domestic markets.NORTH WEST COAST AND THE NORTHBuyers in search of a more rural and traditional side of Mallorca with the most dramatic landscape often gravitate to the North West and north of the island. Dominated by the Tramuntana mountain range stretching from Andratx in the south to Pollensa in the north, the villages of Deia, Valldemossa, Soller, Puerto Soller and Fornalutx will come high on the list of interesting locations to consider.The protected area of the Tramuntana Mountains ensures that new properties are rare and demand for existing fincas and village houses are constantly high at Shortcuts Property Search. The most notable change in the North West is evident in Puerto Soller, which has undergone a face lift as a new tunnel has re-routed traffic away from the harbour, so now the promenade is open only to pedestrians and a few local cars. New hotels and restaurants have begun to spearhead the port’s renaissance and two and three bedroomed village and edge of village properties are commanding prices of EUR550,000 plus. Traditional stone faced fincas can be found for EUR700,000 whilst renovated fincas with sea views are on the market for anything upwards of EUR1.4m.Continuing up along the west coast are Pollença, Puerto PollenÂa, Formentor and Alcudia. The property market in this area is dynamic and has long been popular with the British market. Village houses, modern apartments and fincas are all in high demand and the extension of the motorway from Palma, which now by-passes Inca, has significantly shortened drive times from the airport and Palma.The town of PollenÂa with its famous Monte Calvario steps is a much-desired location now the refurbished village square is cut off from traffic. The town boasts a number of musical and art festivals during the year and its growing number of restaurants and galleries give it an artistic atmosphere. It is a lovely place to relax and watch life pass by.In the Pollensa area there are a number of fincas with land of twenty hectares or more. The valleys of Vall d’en March, Vall de Colonia and Vall de Can Aixartell are sought after for their idyllic locations and mountain views – yet within a few minutes of beaches and the town. A new luxury villa development overlooks the Pollensa golf course.Another area of interest is the villa urbanisation of La Font, close to PollenÂa. It sits on a hill and the beaches of Cala San Vicente and Puerto Pollensa are just minutes away. Apartments tend to be concentrated on Puerto Pollensa and vary considerably. New apartments are from around EUR450,000 with communal gardens and pool.The second phase of the Puerto Pollensa ring road is scheduled to open in the summer of 2008. This new road will divert traffic heading for Alcudia away from the sea front to the east of the marina. This will reduce the congestion in the main town centre and along the promenade.Alcudia has a number of popular urbanisations, including the recently modernised Bon Aire, Mal Pas and Baccares overlooking Pollensa Bay. The small yacht haven of Puerto Cocodrillo is interesting near the golf course with views over the sea in Aucanada. Finally, the exclusive Formentor area retains its exclusivity with very few properties ever on the open market. The natural landscape with white sandy beaches gives this spectacular peninsular a great deal of charm.OTHER COASTAL AREASShortcuts Property Search predicts the North East and eastern coastline will see the most change in the foreseeable future as improved infrastructure has meant they are more accessible and new development in the South West slows. There are several good new developments offering quality affordable homes close to the sea and within easy walking distance to restaurants and shops.The improved Palma to Manacor road will make the villages of Arta and Capdepera and the residential areas of Costa de Canyamel and Costa de los Pinos, located between beautiful mountains and beaches in the north east, easier to get to and therefore more popular.Prices are more reasonable and if you appreciate open spaces, stunning scenery and sandy beaches and are happy to be an hour from the airport, then this area is a good place to explore.Those wishing to experience Mallorca away from mass tourism will quickly feel at home in this part of the island. The main towns of Manacor, Felanitx, Santanyi and Campos all offer shopping, culture and many good restaurants. The Vall D’or golf course and marinas of Cala D’or, Porto Petro, Porto Colom and Porto Cristo also have a variety of leisure activities.The surrounding areas of Vall D’or, Cas Concos, Calonge, S’Horta, Es Caritxo and S’Alqueria Blanca offer many quality-reformed fincas. The best locations offer proximity to golf, sea views and natural peace and quiet and attract high spending clients seeking privacy and seclusion. Property prices range from EUR250,000 to over EUR4 million. Land is increasingly difficult to find and areas north east of these villages are taking over.INLAND AREASVillages within a twenty minute drive of Palma form a sort of rustic belt that surrounds the cities outskirts. Buyers here want a more rural country feel but easy access to Palma, golf and of course the sea.Establishments, Puigpunyent, Santa Maria, Alaro, Bunyola and Binissalem are poular village locations, as are Sencelles and Santa Eugenia. Llucmajor to the east of Palma is now by-passed by the improved PM602 and is beginning to see property prices rise. Heading north, the extended Inca motorway is putting the villages of Campanet, Buger, Sa Pobla and Muro more firmly on the property buyers’ map as journey times are reduced.Shortcuts Property Search notes that prices for older properties in need of renovation in these areas – which had been neglected for years – are being driven up as availability reduces.LOOKING FORWARD INTO 2008Mallorca is one of the most popular hubs for super yachts in the Mediterranean. The island is planning to expand eight of its thirty two harbours and marinas and this is spearheaded by the EUR40million++ expansion of Port Adriano near Santa Ponsa and Sol de Mallorca and the planned redevelopment of Palma’s seafront at its eastern end. Moorings around the island will increase by 25% and in 2009 Palma will begin work to equip the port to accept ‘mega’ cruise ships, further increasing its popularity as an important cruise ship destination point.The old and ugly power station in Alcudia is to be converted into an arts and science museum – a major boost for the area. Also the bay of Can Pastilla will be undergoing a massive regeneration and upgrading, property here will definitely benefit as a result.A new five star hotel is being developed near Llucmajor by the Hilton group, another boost to an area growing in popularity with the British.Sea view and frontline properties will remain excellent investments in Shortcuts Property Search opinion as the authorities tighten up already stringent building regulations. Plots for construction particularly in the South West are in even shorter supply and there are fewer developments in construction than in previous years – reducing the choice of off-plan purchase.Unlike other parts of Spain, where speculative building has led to over supply, the market here is more robust and in certain sectors there continues to be a shortage of good quality property available.Whilst the market will perhaps not enjoy the high level growth and demand of the last few years, it is expected that it will remain steady with prices predicted to increase 7-10% in quality locations. As the slow down in construction deepens on the mainland, the building moratorium on the island is also predicted to slow construction down here over the next 12 months.Finally, this year the areas Shortcuts Property Search recommend to watch and invest in are Palma old town, the east around Porto Colom and the north east in general.

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