Mallorca Market 2012

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Mallorca still of the list for German purchasers. As strange or inappropriate as it might read, the present financial situation in which Europe and particularly Spain is wrestling with - is one side of the coin. On the other side, the more positive side and relating to the property market in Mallorca, is unquestionably the lure of the sun and Mediterranean lifestyle. Secondly, we are hearing an old adage our parents would have quoted on several occasions during their lifetime -"as safe as bricks and mortar". Therefore with that thought in mind it has added a third dimension to purchasing property in Mallorca. That extra consideration is placing one's cash into the safe haven of something physical, something you control, can enjoy or rent. In addition to First Mallorca's very active long term rental division, the company is offering `buy to let´ relating to new deluxe properties in Puerto de Andratx producing a return of up to 4.3% at prices starting from 375,000 for a 120 m2 2 bedroom 2 bathroom apartment with garage and superb community facilities; see reference 52832.Of late the most asked question of course refers to the health of the Mallorca property investment.Clearly the most relevant fact to understand is that one must not confuse the property market of mainland Spain to the situation of Mallorca. It is related only by being under the umbrella of association. Nationalities of Purchasers 42 % German 16 % British 14 % Swedish 10 % Swiss 6 % Russian 4 % Spanish 2 % Austrian 2 % Czech 2 % Danish 2 % Luxembourg NATIONALITIES OF VENDORS 34 % Spanish 26 % German 22 % British 4 % Swedish 2 % Austrian 2 % Brazilian 2 % Danish Investor N e w s l e t t e r

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The First Mallorca Market Report - 2012

Transcript of Mallorca Market 2012

Page 1: Mallorca Market 2012

Mallorca still of the list for German purchasers.As strange or inappropriate as it might read, the present financial situation

in which Europe and particularly Spain is wrestling with - is one side of the

coin. On the other side, the more positive side and relating to the property

market in Mallorca, is unquestionably the lure of the sun and

Mediterranean lifestyle. Secondly, we are hearing an old adage our

parents would have quoted on several occasions during their lifetime -"as

safe as bricks and mortar".

Therefore with that thought in mind it has added a third dimension to

purchasing property in Mallorca. That extra consideration is placing one's

cash into the safe haven of something physical, something you control,

can enjoy or rent. In addition to First Mallorca's very active long term

rental division, the company is offering `buy to let´ relating to new deluxe

properties in Puerto de Andratx producing a return of up to 4.3% at prices

starting from 375,000 € for a 120 m2 2 bedroom 2 bathroom apartment

with garage and superb community facilities; see reference 52832.Of late

the most asked question of course refers to the health of the Mallorca

property investment.Clearly the most relevant fact to understand is that

one must not confuse the property market of mainland Spain to the

situation of Mallorca. It is related only by being under the umbrella of

association.

Nationalities of Purchasers42 % German

16 % British14 % Swedish10 % Swiss6 % Russian4 % Spanish

2 % Austrian2 % Czech2 % Danish2 % Luxembourg

N A T I O N A L I T I E S O F VENDORS34 % Spanish26 % German22 % British

4 % Swedish2 % Austrian2 % Brazilian2 % Danish

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Page 2: Mallorca Market 2012

Mallorca is un individual product.And has never been building developments in excess of demand. Mainland Spain on the other hand

constructed massive blocks of characterless apartments along its coastline, relying on unsecured bank loans

based on pure speculation rather than intelligent market research. Even during the 2005-08 construction

period the old 'hard sell' philosophy and lack of pleasing architecture was wearing thin. In many cases the

property purchase agent quoted a monthly mortgage rate rather than the selling price. For several

considerations that development policy was seriously flawed (we wrote about it as long ago as 2006). The

mismanagement of many Spanish banks' mortgage departments is

now well documented. However, prior and therefore unrelated to these

Government incentives, the period following the 2011 Christmas

holiday First Mallorca enjoyed both a record number of daily website

visits and an increased number of enquiries compared to the previous

year. As a result property viewings showed increased activity and have

continued at a very satisfactory pace to date.

Clearly the lure of the warm Mediterranean sun and lifestyle is not to

be underestimated even in a depressed European economy. Our

results from january 1st January to 31 May 2012:

PROPERTY SALES

Value of Property Transactions: 42,983,370 €Number of Sales: 50Average Property Price: 859,667 €Average Negotiation Margin: 11.49 %Most Valuable Property Sold: 4,200,000 €Most Affordable Property Sold: 80,000 €

To stimulate the market, the

Spanish Government has

i n t r o d u c e d t w o t a x

incent ives. Appl icab le to

p u r c h a s e s d u r i n g t h e

remainder of 2012 the Capital

Gains Tax when re-selling will

b e s u b j e c t t o a 5 0 %

reduction. No date limit on

when the property is sold. In

a d d i t i o n , t h e V A T o n

purchases of new properties

is currently reduced to 4%

from the original 8%.

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