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Mallorca property prices: further evidence of prices having reached their low point

December 6, 2013

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An article in El Mundo this week gives further weight to the opinion that property prices in Spain are in the process of finding their lowest point.

This week El Mundo quoted CBRE, an international property consultancy, as stating that the Spanish housing market has touched its lowest point. The CBRE statement refers to the arrival of investors such as Goldman Sachs and Blackstone into the market buying large portfolios. You can read the article here in Spanish or here for a Google translated version.

Clearly these entities and other large investors have been surveying the market on an ongoing basis with a view to investing at the right time. The fact that they are now buying is indeed a solid indication that we are in the early stages of prices levelling out and the market turning around.

The CBRE statement also indicates that this is a gradual process and makes it clear it is the prime locations which are at the forefront of this trend. This accords 100% with our own predictions and analyses of the market in our posts on the subject over the past few years.

I’d like to add a some practical comments for anyone interested in buying a property in Mallorca.

  • Mallorca as a whole is widely regarded as a “prime location”, but it is important to recognise that there are many different sectors to the property market within Mallorca.
  • The most sought after properties do appear in general to have reached their lowest prices, but other sectors are likely to fall further or at least take considerably longer to turn around.
  • Even within the prime sector of the market some properties are still overpriced where owners have stuck to overly ambitious pre-crisis prices. As I’ve noted many times before, it is important to have an understanding of prices at a ground level.
  • “Prime” does not necessarily mean a seven figure price tag. Traditional townhouses for example can be bought in good locations for less than 350,000 Euros, 2 bedroom apartments in prime location developments can be bought for under 500,000 Euros and coastal villas can still be bought for under 1m Euros – see our Property Highlights for some current examples.
  • While prices are generally lower in most mainland locations, if you choose well in Mallorca you are likely to be buying a better investment.
  • Impressive discounts off pre-crisis prices do not necessarily indicate a good investment. The best properties in Mallorca have fallen in price by relatively little compared to those in lesser locations both here and on the mainland. Insightful buyers are looking to purchase quality, recognising that these are the properties that will represent the most solid investment for the future.

If you would like to discuss these points in more detail, or enlist our services to find you a great property that should also be a good investment, please contact us at: info@mppsearch.com.

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