In spite of the global challenges posed by the COVID-19 pandemic in 2020, ‘Engel and Völkers Balearic Islands’ has closed the financial year with aplomb. With sales transactions of over 460 million euros, Engel and Völkers has proven that international demand for real estate across the Balearic Islands remains strong. This contemporary villa in Puerto Andratx, on the desirable southwestern tip of the island, is just one of the exclusive properties available.
High International Demand for Property in Mallorca
Mallorca has remained an attractive prime location for overseas buyers even during the pandemic. Still considered a reliable and lucrative area for long-term investment, Mallorca’s selling power has not dwindled. In these times of turmoil, the Mediterranean climate and healthy lifestyle have proven to be more enticing than ever, which, according to Engel & Völkers, is proven in the price stability of residential sales prices on Mallorca in 2020.
Country homes and estates with sprawling outdoor areas, lush gardens and extensive terraces are proving to be very popular. Beauty, safety and tranquility are three key trends amongst new home buyers, especially during these troubled times. Imagine yourself as the new owner of this 2.99 million euro historical olive oil mill in Moscari, a rustic town in central Mallorca, with panoramic views across the plains.
Florian Hofer, Managing Director of Engel and Völkers Balearic Islands, stated that “thanks to the strong buying activity of international customers who account for 44% of the total market in the region, we were able to catch up on postponed real estate deals in the summer months and further consolidate the attractiveness of the Balearic Islands as an ideal place to live and a safe holiday”.
Clients from northern and central Europe accounted for the predominant portion of Mallorca’s real estate market. 62% of investors were from Germany, followed by 13% from Great Britain, 8% from Spain whilst 6% were from Scandinavia and 3% from Switzerland.
Growth of Property Prices - Market Stability in 2020
Last year, average property prices grew across all three islands. In Mallorca, they increased from 1.47 million euros in 2019 to 1.5 million; from 1.1 to 1.3 million euros in Ibiza; and to 1.1 million euros in Menorca in contrast with last year’s average property price of 0.9 million euros. According to the Spanish Notaries Association, prices for new developments also surged with the average purchase for new-build properties in the Balearic Islands rising by 11.6% in the third quarter of 2020 indicating the largest increase in Spain.
2020 - The Year of Increased Digital Sales
Christina Deutsch, Managing Director of Engel and Völkers Mallorca Central and South, highlighted the new trends in the search for real estate. She commented that “Travel restrictions made property viewings difficult. However, thanks to innovative technology, we were able to realise a total of over 27,000 virtual property viewings as well as 300 video tours in Mallorca last year”. In addition, Deutsch commented that online searches for central and southern Mallorcan properties rose by 40% in 2020. Key attractions are the island’s excellent infrastructure and accessibility to European airports, the many international schools and the first-class medical facilities. Mallorca is the perfect place for remote-working clients to relocate temporarily or permanently.
This beautifully-restored townhouse with pool, in the southeastern town of Santanyi, is on the market for 1.5 million euros.
Optimism for 2021
With the promise of the COVID-19 vaccine on the horizon, 2021 is already looking brighter. Engel and Völkers is certain that this year’s sales activity will continue to grow as travel restrictions ease and life returns to normal. Virtual and video tours will continue to help clients to view the properties of their dreams. To reinforce this promising forecast, Florian Hofer, Managing Director of Engel and Völkers Balearic Islands, concludes that “We are confident that the Balearic Islands are well-located as the top-selling second-home destination in the Mediterranean. The demand is there and our clients are eager to come and fulfil their long-term plans”.