Alastair Kinloch from Property Works gives his views on the property market in Mallorca for 2019
Potential worldwide economic and political instability is a worry for midterm residential property investments throughout Europe and the USA.
Europe is particularly vulnerable with Brexit looming in October and the rise of far-right and left extremist politics, not just in the UK but in France, Italy, Austria, Spain and Germany.
In Spain, wages are low and house prices are high, which is never a healthy situation. The amount of purchasers on the first rung of the housing ladder is shrinking so demand is not strong in this segment.
Longterm debt is also at record levels, especially in mature economies.
Spanish economic growth has been strong but is projected to moderate in 2019 and 2020.
Mallorca has seen good growth in the last few years but has still to reach the sale price peak last seen in 2007.
Mallorca remains an attractive first or second home destination mainly due to these key points:
• Mild climate and the benefits of a Mediterranean lifestyle
• “45 city” direct flight airport
• High levels of planning, construction control, protected areas and architecture
• International community
• Excellent infrastructure including roads, the airport and telecommunications
• Good supply of quality housing stock
• Palma is now recognized as one of the best places to live in the world
• Fantastic beaches and mountains
• It is relatively safe
• Excellent local and international schools
• Economic maturity (the Balearics boast the highest number of companies per resident in Spain)
• Excellent leisure activities and facilities including shopping, music, cuisine, sport and sailing
• Relatively stable property prices
To summarize, parts of islands are, in our opinion, on par with other blue-chip investment locations such as central London, Paris, Barcelona, Monaco and Zurich and are likely to suffer similar fluctuations in value.
The best areas to buy appear to be Soller, Deia, Palma old town and parts of Calvia. Properties with sea, country or mountain views, have a high build quality and extensive facilities appear to do the best in the long term.
If you are looking for a longterm investment property with these characteristics we do not envisage a significant problem, unless macroeconomic factors, similar to the 2007 crash, kick in.