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Villas in Majorca

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Published: 29Sep2008
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Over the past 18 months the property market in Europe has been a bit unstable, mainly because of the fluctuating Euro. But when we study the VILLAS in Majorca we see a different and interesting trend.

A Villa in Majorca valued at £400,000 in early 2007 would have returned a currency transfer of 1.41 to the £; meaning an exchange of 564,000 Euros. Currently the exchange rate is poor and the same £400,000 would only exchange at 484,000 Euros.

This scenario has left many property buyers in 2008, especially in Spain a little skeptical on whether to purchase now or leave it for a later date.

That said ... Majorca has turned out to be a diamond as far as property purchases go. It would appear according to figures released that estate agents across Majorca have confirmed that trade has remained brisk throughout 2008.

Why would I therefore defend 'buying property in Majorca?' ...

Since the 1950's Majorca has been a major holiday destination, and consequently because of its natural beauty people have continued to buy property. As we study the property sales in Majorca today we see a buoyant property market, when the rest of Europe is in a slump.

What does this mean? It means that Majorca is in demand. If you buy property in a new resort elsewhere in Europe there is a possibility that in ten years your property value will fall. Whereas the buoyancy in Majorca alone suggests that prices will either remain steady or show a steady increase.

If we compare an average villa price with mainland Spain over the last year we will see this demand and buoyancy principle in action...

Although I will accept the uncertain exchange rate has also affected the results, the underlying factor remains that property prices in Majorca has remained stable.

A villa on mainland Spain selling at 320,000 Euros a year ago is now selling at 260,000 Euros. Whereas the same priced villa in Majorca has actually increased by 5,000 Euros. So here is the crunch decision... Do you go chasing the possibility of earning 60,000 Euros once the property market returns and buy on mainland Spain; but also face the possibility of another slump and lose money. Or... invest in property in Majorca and see the value of your property steadily increase with time and reach the 60,000 threshold without panic within 5 to 10 years?

Brits, Germans, French and the Danish are all great lovers of Spain and have in the past 20 years have contributed to development of immense proportions. Today a lot of those newer developments are only part finished as the property slump takes full effect on mainland Spain.

However for the shrewd property buyer... This injection of confidence via figures from Majorca Property Estate Agents, confirming they have been buoyant through 2008 can do nothing other than improve the Villa Property Market in Majorca. But buying property in late 2008 and through 2009, before the rest of the European market regains its confidence; will be seen as advisable. Otherwise we will see discounts on purchase prices in other European destinations as sellers need to sell their properties. Tempting as they may be, we must see that 'property buyers' prefer Majorca and will continue to do so; making resale value of anything you buy remain high.

Any astute buyer will see these signs for the Majorca Property Market as a good long term investment strategy and secure both peace of mind and reassure buyers that Majorca is the best European province to buy property in.

Senior Property Adviser (Majorca Division) If you need assistance in finding your dream villa. Allow us to help... Villas in Majorca

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