At last some admission that the market for luxury property in Mallorca can not operate in isolation and is now coming under the similar pressures effecting the wider Mallorca and Spanish property markets. Evidence coming out of Calvia one of Mallorca’s most exclusive and high value areas, including not only Calvia village but the highly sought after towns of Bendinat; Portals / Portals Nous; Santa Ponsa and Paguera, is that the price of high end villas and country houses have fallen up to 30% in the last year.
This is in sharp contrast to what had happened up until then where Luxury Mallorca Property prices seemed to be holding up despite the wider market falling sharply and the quite dreadful economic backdrop. This appeared to define simple logic and although there was always an argument that the supply side was, and is, relatively constrained demand has fallen dramatically, funding hard if not impossible to arrange, and thus prices unsustainable.
The British owner appears to be the biggest seller no doubt caused by the economic problems back home but also encouraged by the sharp falls in Sterling and the opportunity to sell at lower euro prices while still preserving much if not all their capital when transferring the funds back to the UK. In other words the British owner can afford to adjust their asking prices downwards, and be more competitive, without significantly reducing the actual net receipts in Sterling. The flip side is the Germans are net buyers along with other Euro denominated nationals.
At an individual town level some areas appear to be suffering less than others in the main due to issues of supply and the availability of land for new luxury property developments in the future. In Bendinat for example, where there is little if any development land left, there have been relatively few registered falls in asking prices while in Santa Ponsa / Nova Santa Ponsa, Costa de La Calma and Paguera some significant adjustments in prices can be seen.
One of the biggest falls in asking price, a whopping 38%, has been registered in Calva Village where the asking price, for an estate with a main house of 400m2 (3 living rooms, 5 bedrooms and 4 bathrooms), two guest houses, wonderful tropical gardens, pool, stables and sand school, has been dropped from 4.3€ million to 2.6€ million.
For further information regarding the Calvia property market and the wider luxury homes market in Mallorca please contact David Novi BA MPhilMRICS.
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