The demand for property is now heavily based upon “lifestyle” purchasers rather than speculative investors – people buy in Mallorca because they want to live or enjoy their holidays there. They are less driven by purely financial criteria and are generally less highly geared (i.e. they do not take out as much mortgage debt). This is not saying that buyers in Mallorca are not interested in capital gain – the rental market is a flourishing one and property can pay for itself if one invests wisely.

Mallorca has seen a much more controlled development over the last few years – a very different scenario to many areas of the Spanish mainland where development has run riot fuelled by speculative investors and often corrupt town halls. The local political environment in Mallorca has focussed more on diversifying and upgrading the tourist offer with new four and five star hotels, golf courses and resorts, cultural facilities, marinas and restaurants in addition to sustained efforts to preserve the traditional character and environment of the island. This “new look” Mallorca, as opposed to the tawdry tourist image of the past, has catapulted the island into becoming one of Europe’s most top class destinations.

The recovery of the German economy is beginning to have a positive effect on the real estate market as Germans buyers return to the island. Germans never fell out of love with Mallorca and still visit in their millions but during the down-turn of their economy, they became sellers rather than buyers. This gap was filled to a certain extent by other nationalities, not least the British who are currently benefiting from a strong pound.

To sum up, Mallorca still offers the investor strong short-term opportunities and an excellent environment for longer term.

What now?

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