Monday 12 October 2015 | Expat feed


Overseas property: Majorca property prices rise even faster than Chelsea

The Balearic island hotspot has seen price rises of 15.9 per cent in the past 12 months, according to a report on favourite property destinations.

Majorca villa for sale
Majorca property is in demand, not just from British buyers, but also Russians, Germans and the Swiss Photo: Sotheby's International Realty

From their 21 offices around the world, including Australia, Barbados, Moscow and South Africa, as well as several in Europe, the team at Chesterton Humberts have offered an overview of overseas property trends. Surprisingly, their spring report has Majorca as their best-performing destination, with prices rising faster than even those in popular London boroughs.

As well as London, Majorca, France (Cote d'Azur), Barbados and Switzerland are experiencing strong interest from expats and overseas buyers, the report found. What's more, with rising domestic house prices, low interest rates both at home and overseas and a strong pound, there's plenty of incentive for Britons chasing the expat dream to look into investing in overseas property.

While Spain itself has faced a turbulent time in the past four years, luxury property in particular has remained in demand in all the Balearics, with Majorca proving particularly popular with retiring British expats, who enjoy on average 300 sunny days a year, and those of working age, who have the same entitlements as the locals with regard to employment.

In the last past 12 months prices have increased by 15.8 per cent in Majorca, outperforming the prime central London boroughs of Kensington and Chelsea and Westminster. Prices in Majorca are up overall 39.2 per cent since 2008.

This may be due, in part, to a combination of international demand and the effects of the Golden Visa rule - to qualify for residency status, the property sale must be more than half a million euros.

"House prices are likely to be driven by foreign buyer activity this year which, incidentally, has doubled since 2008," the report points out. "House price data from property portal Kyero shows that in the first quarter of 2014 the average price in Mallorca for a four-bedroom property stood at 862,000 euros, up 5.37 per cent on a yearly basis and 1.89 per cent since the start of 2008. The average price of a five-bedroom property in the first quarter of this year was 1,627,000 euros."

Son Sant Joan, Majorca’s impressive airport, serves all the main UK airports, with regular services with budget airlines such as Ryanair, Monarch and easyJet. Experts expect house prices to rise yet again in 2014 in Majorca, as international buyers from as far afield as China and Russia compete with British expats and, to a lesser extent, German buyers on the island.

Daniel Chavarria Waschke, managing director of Balearics Sotheby's International Realty, with offices in Mallorca and Ibiza, said: “In 2013, some 30.73 per cent of house sales in the Balearics were attributed to foreigners, significantly higher than say Andalucia at 12.35 per cent or Catalunya at 11.54 per cent. Meanwhile, 14.34 per cent of those sales to overseas buyers were for properties over half a million euros. This compares to just 7.43 per cent in Andalucia and 6.57 per cent in Catalunya. The other regions like to talk-up their markets, but the Balearics is the only one that can prove that a melting pot of nationalities has kept the property market busy and buoyant. It’s a pleasure to be conducting business here.”

The Balearics has also been named the region with the highest percentage of registered foreign residents in Spain, with 18.3 per cent of the population listed as foreign on January 1 this year, according to the National Institute of Statistics.

The property market is recovering on mainland Spain, too, with renewed interest in the region. Estate agent Your Viva, which has offices on the Costa del Sol, said 42 per cent of its buyers were British in 2013, up from 31 per cent in 2012, and most were aged between 40 and 60 years, looking to retire abroad.

However, Telegraph Expat blogger Anna Nicholas points out that those of a working age still face challenges to their Spanish dream. “I know of people who simply cannot afford to stay here due to the huge costs of being self-employed, lack of finance, local business costs and draconian local government legislation," she said.

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