Spain’s banks are the now the country’s largest property owners as more and more homes are repossessed on the Costas. But what does this mean for Brits looking to buy or sell their own place in the sun?24th January 2012
While most of us have endured three years of recession there are some places where the global downturn has barely touched the sides, and names likeKnightsbridge, Montecarlo, Nice and The Hamptons all spring to mind.
The latest destination to be added to this lucky list are the Balearic islands and, in particularly, Mallorca, it is claimed. Property developer Ignacio Osle fromTaylor Wimpey de Espana says that “over the past 12 months we have seen buyer interest in the Balearic Islands, especially Mallorca, rise steadily”.
Back on the mainland, until recently the holiday homes market was still on its knees but official figures show sales in Spain overall rose by nearly 6% during 2010 (compared to the previous year). The Balearic islands, on the other hand, enjoyed a house sales surge of 14.5%, helped no doubt by its celebrity residents including Catherine Zeta-Jones and Michael Douglas, who call it home for half the year (and for the other half, Bermuda). Other stary residents include Annie Lennox, Claudia Schiffer and Bono, who discreetly fly on to the island to holiday every year in a variety of luxury properties.
These surprising growth figures should be taken in context. Both the Spanish and the Balearic property markets saw prices drop by up to 60% in some areas in 2008 as sales ground to a halt, particularly during late 2008 and early 2009, so any increase will look good in percentage terms.
Nevertheless, the bounce back on hotspots such as Mallorca is echoed by the Spanish Property Register, which recently revealed that house sales on the Balearic’s islands in general (including Formentera, Ibiza and Minorca) increased by 145% during 2010 compared to 2009 and Mallorca has enjoyed this benefits the most – it had the 2nd highest average asking price in Spain of €428,300 (£376,000).
Mallorca’s recovery isn’t too surprising given that it’s a small island and the coastline where most buyers seek a holiday home is restricted to the quieter coastline east and west of its capital, Palma.
Add to that the six million tourists who arrive every year, and that its airport is one of the busiest in Spain and that the main cruise ship terminal is enjoying more and more arrivals – then a property price recovery was always going to be in the pipeline sooner than the mainland.
But Mark Stucklin of Spanish Property Insight says hopes that the Balearic effect might make it back to the mainland are premature. “Sales during the fourth quarter of 2010 at 93,003 transactions were down 1.85% on the same period last year, suggesting the market has yet to find the legs for a sustained recovery”.