Spanish property market review 2009: Palma de Mallorca
Posted by admin on May 13th, 2009
Palma Central
In Palma the market has been booming for the past five years and reached an all time high in 2007 with prices per square metre in good locations in Palma old town or on a seafront position approaching that of prime property in Madrid. This year prices have adjusted to the new market conditions. For example; a typical villa with views can now be picked up for around €1.4 million. Well located apartments with views have withstood the current market conditions better than other types of property with small reductions off the original asking price and currently you would expect to pay €500,000 for a good apartment.
This spring has seen more positive spanish property market movement and inevitably there are some “bar-gain hunters” about looking for distressed sales which are not so prevalent and certainly not on the scale that might have been anticipated. For the moment prices are not dropping anymore and the market has found its level and stabilised and most property is now taking a year to sell as opposed to 7-9 months at the market peak in 2007.
According to Terence Panton, Managing Partner of E&V Palma; “Since January real estate activity has gradually evolved more positively with some sales to Swiss, German, Russian and Scandinavian clients. The main vendors tend to be local or foreigners that need to sell, British vendors can be very competitive at present when converting euros back into pounds sterling”.
Palma Surroundings
To the southwest of Palma the area covers the residential areas of Son Vida and Arabella Park literally minutes from the city, and the nearby villages of Puigpunyent, Galilea, Establiments and Esporles.
In terms of property and price range, the area is very diverse from million euro exclusive villas to traditional village townhouses. In Son Vida prices have remained stable with small discounts, if any, to close a sale. Prices here for a luxury villa with views cost any-thing from €1.65 million up to €21 million and apartments with golf views will start at around €600,000.
In the surrounding villages prices have decreased between 10-20% where a spacious townhouse can be picked up for €600,000. In this area there are some magnificent finca estates which can cost anything up to €15 million. Fincas in general here with land can range from €1.5 million up to €5 million. Land as always, makes an interesting investment and plot prices range from €300 – 650 per m2.
Leaving Palma heading south east towards Llucmajor is an area which has, over the past 10 years, attracted substantial local investment with the development of a new road sys-tem making the whole area easily accessible from Palma. In addition, major foreign in-vestment from major international hotel chains including Marriott, Hilton and the five star Son Julia hotel has raised the perception of the area. Local investment continues with plans to refurbish the Playa de Palma area and a new road is planned linking Playa de Palma to the city.
Prices here have dropped by an average of 6-13% from the peak of 2007/2008. Now, a well located villa with sea views can be picked up for €1.2 million and an apartment with views for around €390,000. A finca or country house with land can now be bought for approximately €950,000 offering privacy and good links to Palma and the rest of the is-land.
Santa Ponsa
There has been a great deal of new development over the past five years mainly focused around one of the four golf courses in the area and the extension of the marina at Port Adriano. There has therefore been a generous supply level of second home property avail-able and this has impacted the current market situation.
People are attracted to this area because of the excellent facilities, international feel and it is extremely popular with the British, German and Scandinavians. Since the middle of 2008 prices have come down 8-15% depending on the property, location etc… However, much of this is down to a price adjustment from the inflated highs of 2007.
A four bedroom villa with views will sell for approximately €1.250 million and well lo-cated, high quality 2 - 3 bedroom apartments, in the new communities built 3 or 4 years ago now start from around €350,000, although property might take longer to sell (between 12-18 months). Plot prices have fallen as most investors “wait and see”. Urban land is cur-rently valued at around €350 per m2.
Puerto Andratx & Paguera
The market at the beginning of the year was quite slow which is not unusual and buyers include German, British and Scandinavians. There has been little significant change in prices in these areas and prices for well located top quality properties remain basically the same.
However, there have been some reductions in price for properties away from the front line with no sea views of 10 -13%. For example; in Puerto Andratx, a typical four bedroom villa is now on the market for around €1.4 million with views you can expect to pay €2.8 million and a two bedroom apartment with no view can be picked up for around €400,000 – with views would cost approximately €700,000
Further down the coast, Paguera offers excellent value particularly for first time investors. A villa with sea views is priced at around €1.6 million. Prices for apartments in this area have come down this year and well located two bedroom apartments with sea views can be found for around €495,000.
The Easter/May Bank Holiday period has been steady and sales have been made. The spring looks promising with potential clients already booking viewings over the next few months.
Soller & Puerto Soller
The current picture shows that prices are at a similar level to 2008 with some discounts of around 10-15% on villas and fincas. Well located apartments, townhouses and plots of land in particular appear to be holding their prices with little or no change from the original asking price. Property is taking from 10 months to 18 months to sell.
In today’s market, a well located villa will cost around €2 million and an apartment around 400,000. A three bedroom townhouse will cost an average of €650,000 and a good plot will cost in the region of €350 m2.
One important development for this area is the new five star deluxe Jumeriah Port Soller Hotel which is scheduled to open early 2011. This project follows on from substantial foreign investment in the island primarily from major international hotel groups including Marriot, Arabella Sheraton, St Regis Resorts and Hilton.
Pollensa
The north of the island attracts many discerning clientele whom this year will find that they can buy more for their money. For example, a four bedroom villa in a good location now has an average price of €1.7 million representing approximately a 6% decrease in value over 2007/2008. The apartment market has witnessed decreases of around 17% with average price for a two bedroom apartment with views of approximately €250,000.
Townhouses have seen price decreases of around 20% achieving an average price of around €550,000. Fincas and country houses are maintaining their prices although some will offer a slight reduction to close a deal. Now, you would expect to pay just under €2 million for a well located finca. Plots of land have also come down in price by approxi-mately 28% costing around €300,000 for a 1,500m2 plot.
Coastal properties still achieve premium prices together with well located fincas with good views and plenty of land providing complete privacy. There is increased demand for contemporary designer houses. Although the market is slower, particularly for properties over the €3 million bracket, there is a great deal of serious interest.
Puerto Pollensa
Prices rocketed in this area over the past five years. Currently, a well appointed, four bed-room villa with views has come down marginally by approximately 10% in price and will cost an average of €1.7 million. In the apartment market prices have come down around 25% with a good two bedroom apartment with views selling for an average of €300,000.
Recently, there has been a strong demand for the exclusive end of the market with clients willing to spend large budgets on penthouses with views to the sea and close to the beach, which average €640,000.
Alcudia & Puerto Alcudia
In this area there remains a healthy demand for premium property, usually front line, which has retained its value. Similarly, well located fincas and good plots are much sought after and generally property is taking between eight months to over a year to sell.
Some prices have decreased in this area at around 10-20% depending on the property and location. For example, a four bedroom villa with views now has an average price of €1.2 million. A two bedroom apartment with views will come in at around €290,000 and a plot of 1,000 sq metres will now fetch an average price of approximately €380,000.
CONCLUSION
Says Daniel Chavarria Waschke, Managing Director, for Engel & Völkers Southwest; “It’s too soon and would possibly tempt fate to say that 2009 might just turn out to be brighter than we thought.
Right now there is interest in Spanish property on Mallorca across the board, in the south west average sales are still over €1 million. However around the island property below €500,000, including apartments is now starting to move. Although Engel & Völkers has a reputation for selling exclusive top end property the company is focused on its entire market range to maintain sales levels.
The spring indicators of increased market movement, serious interest, cash buyers and the general fall in prices combine to make Mallorca attractive to the potential investor more than ever. At the end of last year the Financial Times highlighted Mallorca as one of 10 top locations to invest worldwide and the last few weeks have demonstrated that the is-land is still very much on the international radar”.
Source: spanishpropertyinsight.com
Tags: Mallorca proprety, Palma de Mallorca property, real estate market, real estate review, Spanish proprety, spanish real estate
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