_Mallorca market update
Boasting a warm climate and easy accessibility - close enough to justify a weekend getaway and with year-round flights from across Europe and beyond – the region has seen its total value of villa sales above €2m increase 99% in the last three years reaching €768m in 2017.
“2017 proved a record year in terms of sales volumes in our region and this uptick was mirrored across the rest of the island.”
Boosted by high tourist numbers, the island’s airport saw passenger arrivals hit 28 million in 2017, up 7% year-on-year.
The price of villas sold in south-west Mallorca has increased for the last four consecutive years and now averages €4,951 per sq m.
Land at a premium
For the first time in a decade the Mallorcan residential market faces a new challenge; a lack of land. Developers seeking new sites in south-west Mallorca are struggling to find land suitable for large apartment projects.
In 2018, we are likely to see developers target older villas on larger plots as potential opportunities for redevelopment. In the few areas where sites are available such as in Son Vida, the authorities have suspended building licenses.
The municipality of Calvia, which is home to some of the resorts with the best sea views, including Portals, Bendinat, Santa Ponsa and Port Adriano, is affected by the building license moratorium (which also covers applications for refurbishment) effective until 2 November 2018. Such supply constraints, combined with strengthening demand explain the recent acceleration in prime prices.
Resort analysis
Analysis of the sales volumes in our four main markets underlines the extent to which Port d’Andratx dominates the region’s sales above €2m. In 2017, 304 villas priced above €2m changed hands, accounting for 40% of the sales across the four main resorts.
Following a stellar year in 2016 when total sales volumes reached €275 million, local agents expected sales in Port Andratx to plateau in 2017 but the resort still registered a 10.5% increase in total sales value year-on-year.
"Recent investment in the Port’s infrastructure – road resurfacing, planting and lighting, has enhanced the resort’s appearance further."
In Son Vida, despite the moratorium, investors are active, several purchasing land knowing that they have to wait 14-20 months before they can apply for a building license yet confident prices will be higher and fewer sites will be available at this time. Prime prices in Son Vida increased 12% in 2017 on an annual basis.
Prime prices in Bendinat rose 17.5% on average in 2017 with Old Bendinat the focus of a flurry of sales. Three refurbished villas priced at €20m, eight refurbishment projects (six of which will come back onto the market) and a frontline beach sale above €20m boosted sales volumes compared with 2016.
The elevated areas of Costa d’en Blanes in Golf Bendinat, Anchorage Hill and in the upper part of Calle Victoria (Portals Nous), also saw sales strengthen in 2017 compared with 2016.
With limited supply in Old Bendinat, Anchorage Hill, Golf Bendinat and Portals Nous, buyers are looking to the area beyond the Mardavall Hotel towards Andratx, including Son Caliu, Palma Nova and Torrenova.
Santa Ponsa and Port Adriano registered an increasing number of sales above €10m in 2017. In Port Adriano a frontline villa sold for over €20m and in Cap Adriano three villas sold for €10m each. Most in demand are villas with sea views, ideally those with views across to Malgrats and El Toro Islands. The homes around the area’s three golf courses, Habitat Golf, Golf Santa Ponsa and Calle Belgica, also generate strong sales.
View properties for sale in Mallorca
For more information contact Mark Harvey
Data was supplied by Knight Frank's partners in Mallorca, Mallorca Gold.
Market definition: The SW Mallorca region includes Son Vida, Portals/Bendinat, Sol de Mallorca, Nova Santa Ponsa/Port Adriano, Camp de Mar and Port Andratx, but excludes the city of Palma and Palma Old town.