Balearic spotlight in conjunction with Tecnitasa
We’ve teamed up with Tecnitasa to try to give you an insight into what’s happening currently in the Balearics and key market trends.
Being one of the most highly regarded mortgage intermediaries on the Balearics and given the increase in transactions and property values that we’ve seen in the last few years, we’re regularly asked by senior management in Spanish banks, private lenders and International banks about the market in general. They ask us to share our opinion of the market, levels of business, typical client profiles we are dealing with and levels of demand, so that they can make key strategic decisions in relation to their lending criteria and asset allocation.
We asked Tecnitasa, a valuation company regulated by the Bank of Spain, for their opinion on the market.
When Covid hit in early 2020 we, like many developers and agents in Ibiza, considered what might happen in one of our most important markets.
By the time June/July 2020 came, there was only one way the demand was headed, and I think it’s fair to say it has gone through the roof! The white island is quite clearly THE property hotspot right now with lack of supply pushing asking prices upwards. The island continues to be as strong as ever.
What about Mallorca?
Mallorca is has seen a similar increase in demand, although it doesn’t suffer from the same lack of product supply as Ibiza. Property prices however are still on the up and at an all-time high, driven in part by the impact of Covid on our lives. Clients are looking for an improved quality of life in a location with good transport connections and Mallorca really does have it all!
What are the valuers saying?
The graph below shows that, aside from August, 2021 consistently saw more valuations in Ibiza and Mallorca above €2.5m than in 2020.
Luis Diaz comments, “The figures presented are from a detailed study of the market changes from valuations conducted by Tecnitasa on luxury properties of over €2.5m between 2020 and 2021, excluding of course those sales that were completed without financing and valuations carried by other companies. We see a substantial increase in >€2.5m valuations, with various recent news articles highlighting an increase of 55% in the tax generated from these sales.
Luis continues, “2020 was without doubt the year with the largest number of valuations of this sector with a total of 149 valuations, 70% higher than in 2020, with a focus on the 2nd and 4th quarters when we generally see that real estate movements are at their highest. The Balearic market is clearly valued, not only for its quality of life as a place to live or own a second home, but seen by many investors as a secure location to hold property”
At Mortgage Direct we’ve seen a similar increase in demand, not only with traditional clients looking for financing on their first or second residence but also investors and developers, making it more important than ever to have the right solutions available for all our clients at any given time.