Impartial, informed comment and expert advice on the property market in Mallorca

Market snapshot

We’ll be talking regularly to real estate agents and Mallorca property watchers about the state of the market. First up is island real estate agent David Novi, whose blog, www.mallorcapropertymarket.wordpress.com is well worth looking at.

How do you see the market, David?

Personally, I’d say that values are either at the bottom of the cycle or not far off it. This is bearing in mind that a large portion of the market is overpriced.

What does that actually mean?

Asking price is not in line with actual value. Having said that, prices are beginning to come down.

Why?

A lot of people say it’s all down to the weakness of Sterling, which is partly true. If a British seller can sell their property now to a Euro buyer, the appreciation of the Euro against Sterling means they have a chance of making back what they’ve lost because of the fall in property prices.

But, I’d say the real reason is that market prices have quite simply fallen and asking prices have to reflect this. It’s a buyers market and British buyers looking for a bargain are not in any particular hurry. So sellers need to price more realistically to attract what buyers are out there.

How does a buyer find out what a realistic price actually is?

You have to do the research. Talk to a number of real estate agencies. Find whose opinion you can trust. As I’ve said, if you’re a buyer you’re probably in no particular hurry. Make the most of this. Find the part of the island that offers what you’re after and keep an eye on prices. Study the trend. And when you’ve found something, haggle!

What about the longer term future of the Mallorca property market?

Unlike the mainland where things are pretty dire, as we all know, the Mallorca property market still has significant defences. Land is at more of a premium and building has been more tightly controlled, although it sometimes doesn’t look like that.

Also, there hasn’t been an invasion by investor buyers. For the British, Mallorca’s never really been a buy to let market. It’s always been about quality of life and a more family oriented lifestyle and people are still coming specifically for that reason.

Like who?

I was talking to a loss adjuster recently who lives in Mallorca and does business in London via the Internet. It’s people who are able to work like this and who aren’t tied to the UK who’ll keep coming.

And the outlook?

In the short-term things will continue to be slow. But we are over the worst and living or having a second home in Mallorca will continue to be highly desirable and a sound investment for British people who can afford it and who take a long-term view.

Thank you.