Since 2016, the property market in Mallorca has developed significantly, compared to previous years. With increases in the number of sales, investors have displayed a confidence amongst investors, particularly from international buyers, including Scandinavians and Germans.
The property market has maintained its constancy and Mallorca is leading the price recovery throughout Spain. The Spanish National Institute of Statistics reported an increase of 4.3% in prices paid between quarter 4, 2015 and quarter 3, 2016, for property in the Balearics, compared to 2.8% across the whole of Spain for the same period.
There was a shift in supply and demand, and in 2016 it became apparent that demand was continuing to exceed supply in most sectors of the market. This has mainly been recorded in the north and west of the island, in addition to the south-west area, where there is a higher density of housing on the island. With an increase in restrictive building and development regulations, we can assume that this will change in the foreseeable future.
In 2016 we have seen Capital Gains Tax reduced from 20% to 19% for non-residents, which is great news for investors. In recent events, we saw the European Court of Justice ruling that Spain can no longer discriminate between residents and non-residents. This means that inheritance tax for non-resident property owners drops from 34% to between 1% and 7%, depending on the recipient.
In June last year, the UK voted to exit from the EU, and this had an immediate effect on the Euro/GBP exchange rate; which we saw drop to as low as £1.13 to the Euro. Since this occurred, the press in Spain has reported about the impact on sales to UK buyers, with reports indicating higher demand from the UK since the vote.
The ‘Golden Visa’, which offers citizens of non-European countries residency in Spain, once they have invested at least €500,000 in property is still in place, giving confidence to non-EU buyers looking to live full-time in Mallorca.
Prices are continuing to rise, with many areas already above the pre-global financial crisis levels. This trend should continue throughout this year, due to the shift in supply and demand. Mallorca is still attracting a broad variety of investors and is appealing to the most discerning buyers around the world. Demand is strong and is increasing as the months go on. With prices rising, there are still good reductions on asking prices, making for good deals, depending on the market sector and location.
It is no wonder that Mallorca is in demand, as it is a wonderful place to live, and the performance of the market is reflecting this. With UK buyers holding out hope of an improved conversion rate, now may be the time to act, before the dream property becomes out of reach.
Mallorca is proving to be an excellent place to invest, and with indications that this will only continue, now may the right time to make your move.
Recent reports have also predicted other areas of Spain will also be profitable for investment, including Marbella, with 2017 set to be the most rewarding year yet. Investors are searching for Marbella property for sale, whilst making wise business choices, to invest now before properties become too expensive.
Spain’s property market seems to be looking more prosperous as the months go by, meaning that acting quickly will get you more for your money. Together, we can help you make a wise decision to ensure you find your dream home, as well as getting the most from your investment.