Mallorca as a whole is a solid market. 15/01/08

Mallorca as a whole is a solid market. The dynamics here are markedly different to the mainland: planning restrictions have been more rigorous for many years and have now become even more tight, so the environment is well protected; it is a very international market with demand from all over the world; it is one of the best connected location in Europe; and it is moving continually up-market.

This will continue. Whilst I expect the rate of increase in value to slow this year (prices overall could even fall slightly), the prime areas will remain strong and the best properties within them are likely to continue to increase in value. To-date this year I have received more enquiries than for any other year at this time. Over time the rate of increase in value is likely to speed up again.

To a large extent the best rental areas are also the areas that are the best prospects for capital increase. There is good reason why these areas have become the most sought-after and this is unlikely to change. The prime areas are:

- The SW coast between Palma and Puerto Andratx.
- The Soller valley
- The North around Pollensa and Puerto de Pollensa
- The SE from Porto Colom to Santanyi

All areas have well established and increasingly strong rental markets and a high demand for good property. "Good" generally means sea or country/mountain views with good outside space and access to a pool. These are all key criteria.