Investing in property in Mallorca

The global recession has affected all markets no-matter where, and no-doubt this will continue to be the case for some time yet. Mallorca has not escaped this, particularly in the early part of 2009 when markets practically froze.

Very few people were buying properties anywyhere at this time, regardless of their financial position. However, interest in property in Mallorca has not reduced as much as most other international markets.

There are many reasons why Mallorca should remain as one of the most solid markets in the world, and be at the forefront of the revival in the proeprty markets when the recession does eventually ease with any certainty.

Property supply in Mallorca is limited.

• Mallorca never indulged in the frenetic large scale building development projects seen on mainland Spain. Furthermore planning restrictions have been strengthened and enforced even more rigorously in recent years.
• This limit on the opportunities for development has influenced the nature both of reformation and of new-build projects. Where there are opportunities for new developments they are generally built to the high standards, and similarly renovation works are worth carrying out to a similarly high level.
• The result is that the property market in Mallorca is being steadily pushed up-market and this underlying trend has not been slowed by the recession as it is the prime location properties that are currently being sought-out by investors looking to take advantage of the depressed market.

The underlying demand for properties in Mallorca is strong.

• Mallorca is an international market with demand for property from all over the world. To some extent this mitigates the effects of the economic downturn in any one particular country.
• The rental market continues to get stronger. This drives prices and, in the current environment, offers some owners a financial means by which they can keep their investment until the global economy improves.
• There are more and more people wanting to move to Mallorca on a permanent basis to take advantage of the better lifestyle.

These factors all moderate the effects of the international slow-down and show Mallorca to be a good investment. And none of these factors looks set to change. Mallorca is becoming more-and-more sought-after and increasingly exclusive.

In summary to the above, whilst prices here have fallen due to the global recession, and some owners are under pressure to sell and will offer substantial discounts, there is an underlying "latent" demand that does not appear to be diminishing. This indicates that when the market returns it will be strong and therefore 2010 should be a good, possibly "once-in-a-lifetime", opportunity to invest while prices are still depressed.