Latest market report shows Mallorca is ‘safe as houses’ for property investors

2021 was close to a record year for the property market in Mallorca, despite supply constraints that prevented the market from reaching its full potential. Market turnover rose 81% to 6.6 billion euros on the back of an increase in house prices, and a surge in foreign demand that took the market share of international buyers to 40%.
A record year just after a global pandemic? If you look back at home sales and house prices in Mallorca over the last two decades, you see a remarkably safe housing market that brushed off the financial crisis and pandemic alike.

According to figures from the Spanish notaries’ association, sales fell in both the crisis and pandemic, but prices only adjusted downwards for a few years during the financial crisis before recovering strongly from 2014 onwards, and even increased by close to 7% during the pandemic year of 2020.

Depending on the data source, Balearic house prices are now between 18% and 60% above the peak before the financial crises, whilst for Spain as a whole prices are still 3% below the peak of 2007, according to figures from the Land Registrars’ association. Investors in some other parts of Spain are still sitting on negative equity, but not in Mallorca.
This shows that property in Mallorca has been a remarkably reliable investment offering both unbeatable utility-value and wealth-protection for long-term investors who have seen their capital increase over the years as they enjoyed using and renting their home in Mallorca.

The biggest problem holding back the market in Mallorca today is the scarcity of building land and new homes for sale leading to frustrated demand. But, on the other hand, land constraints mean the property market in Mallorca is never at risk of oversupply, which protects the value of real estate on the island.

Along with its world-renowned quality of life, and healthy coastal environment, Mallorca’s demonstrably low investment-risk over the medium to long-term has helped fuel the strong demand for homes on the island we currently see with both local and international investors.
With growing local and international demand boosted by the lifestyle changes people have made in response to the pandemic, and a chronic shortage of land and homes for sale on the island, we forecast that prices will continue to rise in Mallorca, and the island will continue to be a safe haven for property investors.
(Source - spanishpropertyinsight.com)