Prime property in Mallorca proves to be resilient after-lockdown!

 

Engel & Völkers Mallorca has reported 217 million euros of sales to the end of July, while foreign buyers have increased their demand when the borders opened. buy property in qatar

At the premium end of the market, Mallorca continues to attract buyers mainly from outside the country after locking down. Engel & Völkers Mallorca closed the period from January to the end of July with 18 island property shops with sales volume of €217 million.

Says Florian Hofer, Managing Director, Engel & Völkers Balearic Islands, "We are very pleased with the sales activities to date in view of the circumstances. When the borders opened in July, buyers arrived and wanted to complete their long-term plans. The sales business in the upper segment maintains market stability and prices in the premium and new building sectors.'

Traditionally, July is a slow month. However, Engel & Völkers reported this year an increase in prime real estate sales in Mallorca when the borders opened on 1 July, with an increase of 75% compared to the same month last year. Palma International Airport, which handled 1,1 million passenger movements, also experienced demand for Mallorca, more than any other Spanish airport in July.

Engel & Völkers Mallorca has been selling daily

Since July, sales ranging from EUR 300,000 to EUR 12,9 million have been made every day. Many of the multi-million euros in sales in the southwestern region have increased in the 10-million euros bracket. Followed by the Son Vida area, where sales were made between EUR 2 and 8 million.

The majority of buyers are German, Austrian and Swiss, followed by British and French. The lockdown led to further searches and high demands. In the South-East, for example, 110% more inquiries were received in June and 150% more in July in the same months last year. During June and July, inquiries also doubled with the exclusive Son Vida area in the central and southern regions.

Priority shift: privacy, outdoor space/home/broadband/home views

Customers who consider spending longer periods of time or living permanently on the island have changed their priorities. Thus tick boxes "must-have" include open space, good connectivity, a home office, privacy and views. Now customers are more interested in central heating in order to use their property year-round and to save energy. The demand remains focused on country houses with land and villas with views alongside the sea.

Authentic lifestyle in the village is becoming increasingly popular. There is a growing need for refurbished traditional city houses in south-east and central Mallorca with modern contemporary interiors and a small pool at prices ranging from about €700,000 to €1 million.

The capital of Palma is in constant demand for apartments in historic old town buildings or by the sea along the Paseo Maritimo or around the Port of Portixol.

Safety & Health

A modern and efficient health system with multilingual staff and leading specialists offers Mallorca a high level of safety and security. According to a report published last year by the Institute of Integration and Health based on the Health Ministry's statistics, the Balearics were among the top Spain's most spent in private healthcare with 25 hospitals, including 11 public and 14 private.

Technology of sales

Engel & Völkers Mallorca focused on creating video and virtual tours to maintain the buyer's interest during the lockdown. Engel & Völkers had 140,000 hits and 14,000 tours between the end of June and the end of July. Some sales were even made with a virtual view with the help of the sales representatives during lockout.

Rental of rentals

Increased rental activity in the south west, central and northern areas was driven by the fact that a lot of customers want the island's life before purchasing and some want a "bolthole" on their favorite private holiday island. Long-term leasing in Palma continues to operate on a similar level to last year, with an average lease period of 12 months plus 1,000 euros per month.

Hofer concludes: "Up to now, our sales results indicate that international purchasers consider Mallorca a safe haven to own a second home, where the threat of a lock-in is avoidable and long-term investment is constant. A unique blend of excellent infrastructure, a modern public and private health care system, extensive recreation and sport facilities and international institutions, which make Mallorca a top Mediterranean destination supports the island's real estate market."

Since the global economy shut down by international tourism, owners of tourist rental units in Spanish cities such as Barcelona have pulled their homes off the short-stay market.

Tourism is one of the pillars of the Spanish economy, which makes it particularly difficult for Spain to face up to the Covid-19 crisis, which has cut global tourism to a fraction of normal levels, and left vacation rental owners without any customers.

In July, the number of holidaymakers visiting Spain decreased by 75% compared to the same month last year; in July the main British market fell by 83% to 377,886 visitors, the last month in which numbers are available. It was before the UK started quarantining people from Spain, and Germany started to advise against traveling to Spain, so probably August was even worse.

The worst hit region on the coast was Catalonia, down 82 percent even worse than the Canary Islands (-79 percent), and significantly worse than the Balearic Islands (-75 percent, the only region that received over a half million foreign visitors in July), and Andalusia (-71 percent ).

Casas expelled from the market

The lack of tourists obliges renters to take their homes away from the short-stay market, especially in cities like Barcelona, where there are at least the possibility to turn to the long-term rental market.

According to the Barcelona Association of Tourist Apartments (Apartur), this summer 62 percent of the apartments in the city disappeared from the short-stay market. This means nearly 5,900 flats that are no longer offered for short-term holidaymakers and other visitors. Many of them have changed to the long-term rental market.

In Spain and around the world, it is likely to be a similar story that attracts large numbers of foreign tourists facilitated by global rental platforms, such as Airbnb. This explains why Airbnb and other holiday rental platforms now focus on the long-term market.

What about Spanish holiday rentals? You will also have seen a significant decrease in foreign visitors, partially offset by an increase in local tourism. But unlike town pads, coastal residences cannot so easily turn into a long-term rental market when tourism implodes, so I imagine that fewer homes are being taken away from the market in these regions, at least for the time being.

Apartur warns that the company is directly responsible for maintaining some 5,000 jobs in Barcelona and many more indirectly, that normality will not return to the shorter-term business for one year, or more. Apartur and its members hope that demand for rent will increase faster than hotel demand, because social distance in private apartments is easier, they argue.