Market update - August 2008. 25/08/09

A lot of people have been asking what the state of the market is here in Mallorca. It has certainly slowed overall due to the international economic environment, but has not been hit like parts of the coast of mainland Spain, or indeed the UK! The market in Mallorca is completely distinct to that of the mainland. It is a stronger / more resilient market here than most in Europe. It is a small island with a strict planning regime and demand from all over the world, not just the UK and Germany as was more the case in the past.

The slowdown has had most effect in the less sought-after areas (e.g. NE and South coasts), and for the smaller holiday properties (e.g. 2-bed apartments). In these sectors prices there will have been a net fall in price buy the end of this year.

Prices are holding more firm for the more expensive properties in the most sought after areas.The prime areas are Puerto Andratx, Puerto Pollensa, Soller and a few other spots on the SW coast. Within this, good country estates and sea view villas are the most solid. This reflects the fact that Mallorca is going increasingly up market. Having said this, there is currently more willingness to negotiate whereas at this time last year prices were still increasing and negotiations were seldom likely to be more than a token gesture on good properties. Furthermore there are certainly some vendors who are under some pressure to sell and so there are some good deals in some instances.

At the risk of sounding like an estate agent, this should be a good time to buy. All the indications are that prices in Mallorca will start increasing again as soon as there is some confidence ion the international markets again. How long this will be the situation depends on how things progress throughout the rest of Europe. In the meantime prices on good properties will be static overall and there will be some good deals around although don't expect significant reductions on the best properties.