Balearic Islands – Spain’s most exclusive region
The Balearic Islands will continue to be one of Spain’s leading property markets in 2022. Prices for land, houses, fincas and apartments have been rising every year since 2014. The four islands have long been one of the top destinations for buying property in the Mediterranean. Dominating is Mallorca – the largest of the Balearic islands has historically had a 77.5 percent share of the number of privately financed residential property transactions (data for the first three quarters of 2022). The market shares of Ibiza and Menorca are just over 11 percent each. Formentera has 0.23 percent.
Mallorca – top destination on the Mediterranean
Mallorca
Mallorca is the ideal location for a holiday home. Not only does it offer a sunny climate in a Mediterranean setting, but also real diversity and a good quality of life with easy access, security, perfect infrastructure and all kinds of leisure activities. Whether you are looking for family fun, sports, nightlife or quiet seclusion – there is something for everyone. There are idyllic beaches all over the island. Or you can immerse yourself in the lurid party life that is still the order of the day in Playa de Palma and Magaluf. But Mallorca has been trying to move away from this cheap holiday model for years. The number of five-star hotels has increased significantly. The beach clubs and some of the marinas in the southwest, such as Puerto Portals, Port d’Andratx or Port Adriano, are sophisticated and cosmopolitan places to have fun, chill out and eat. If you don’t like this scene, you can still find a quiet and charming atmosphere on the east of the island, with fincas and authentic village houses in a Mediterranean setting.
Highlights of the island also include the capital Palma, with its harbour atmosphere and historic old town. There are shopping streets with trendy bars, restaurants and cafes. Palma is also one of the most important yachting centres in the Mediterranean. For those who can afford it, Mallorca offers a complete lifestyle package with excellent gastronomy, wellness, over 20 golf courses and all kinds of water sports. The increasing number of private jets at Palma’s Son Sant Joan Airport is another indication that Mallorca has long since become a top destination for the rich and super-rich. If you are looking to invest tens of millions in a villa on the Spanish coasts, the only good choice is in the southwest of Mallorca – apart from Marbella.
And a big plus for investors is that Mallorca real estate has offered secure value retention for years in times of uncertainty and inflation. In 2022 (Q1-3 data/Ministerio de Transportes), sales of privately financed housing in Mallorca increased by around 14 percent compared to the same period in 2021. The increase in transactions was particularly strong in the capital Palma, the south (Llucmajor/Campos) and the north (Alcúdia/Pollença), with more than 20 percent. On the other hand, the southwest (Andratx/Calvià) was the only area to record a drop in sales compared to the previous year. However, 2021 was a very strong year here, with significantly higher sales figures than in the pre-Corona years (2018/2019). Since the spring of 2022, there has been a shortage of supply, especially in the luxury segment in the southwest but also in the eastern areas (Artà/Manacor/Santanyí, ). The construction of new properties cannot keep up with this pace, especially since good building plots are becoming increasingly scarce.
Nevertheless, the southwest remains the strongest market, where many of Mallorca’s absolute prime locations are concentrated and where most residential properties are sold after Palma. Mallorca’s highest average prices per square meter (€7,100 to €8,100) are achieved in Portals Nous/Bendinat, Costa d’en Blanes, Port d’Andratx/Camp de Mar and the upmarket areas of Son Vida, which belongs to Palma. Villas in the southwest can cost over 20 million euros. There are also trophy properties for over 30 million euros. However, the main focus of demand in the luxury segment is in the price range of up to 8 million euro for villas, up to 2.5 million euro for apartments and up to 3 million euro for Fincas.
In Palma, several areas around the old town and along the coast are in high demand. Top prices can be found in areas such as Santa Catalina, El Molinar-Portixol and Génova (4,680 to 5,700 euros/m2). Palma recorded a price increase of 15.7% year-on-year in 2022.
Exclusive properties in attractive locations can also be found in the west and north, such as Deià, Sóller, Valldemossa, and Pollenca, where country estates cost up to 13 million euros and villas up to 9 million euros.
The southeast tends to be in the middle of the range, but in the municipality of Santanyí in particular, prices have risen sharply to an average of 4,730 euros per square metre in 2022: Fincas (1.3 to 8 million euros), villas from 850,000 to 8.5 million euros, townhouses in Santanyí to 2.5 million euros, apartments from 260,000 euros.
Prices are slightly lower in the best areas in the south (municipality of Llucmajor) such as Cala Pi/Vallgonera (4,460 €/m2), Maoris/Puig de Ros (3,560 €/m2) and Cala Blava/Bellavista (3,972 €/m2).
The northeast, in particular, still offers good value for money despite rising prices. At the moment the demand is mainly for fincas (€900,000 – 1.8 million), chalets €500,000 to 700,000) and townhouses in Artà (€300,000 – 600,000). Some areas in the centre of the island are a little cheaper. At least you can still find places where the average price per square meter is just under €2,000. The village of Maria de la Salud is considered the cheapest place in the Balearic Islands, with an average price per square meter of 1,199 euros. The better areas in the centre of the island are Santa María or Alaró, where the average price is over 3,000 euros and exclusive fincas are on offer for almost 8 million euros.
Ibiza & Formentera – Legendary style and high price level
Ibiza & Formentera
Ibiza, the third largest of the Balearic Islands, has a unique flair, avant-garde hotel and restaurant concepts and a legendary style. In summer, Ibiza Town (Eivissa) and Platja d’en Bossa in the south are among the best tourist hot spots in the Mediterranean. The island often has the highest density of international celebrities per square meter in Europe. They are attracted by the safety of the destination, its mix of natural scenery with 71 beaches, hidden coves, fine dining and the special entertainment of raving with the best DJs in the world. Despite the summer hustle and bustle, Ibiza still has a lot of unspoilt nature, especially in the north. And in winter it is quiet anyway.
The real estate on offer is first-class ¬ in no municipality is the average asking price below 5,265 euro/m2. However, the supply is limited. The number of properties sold in 2022 was up by more than 27 per cent compared with 2021. The high demand has once again triggered a surge in prices, which was most pronounced in Sant Antoni, which continues to be the cheapest municipality, with an increase of more than over 35 percent. Elsewhere, the increase ranged from 6 to 20 percent.
New construction in Ibiza is dominated by villa in private and secured urbanizations, with prices starting at 3 million euros, and apartments starting at 300,000 euros for one-bedroom apartments. Otherwise, 20 million euros is the upper limit for villas and country estates. Villas and fincas on Ibiza are not available for less than 1.5 million euros. The most expensive areas to buy property in Ibiza (between 5,900 and 7,450 euros per square metre on average) are Es Cubells and Sant Josep in the municipality of Sant Josep, Dalt Vila/La Marina and Marina Botafoc/Talamanca in Ibiza Town, Jesús in Santa Eulalia and the entire rural municipality of San Joan de Labritja in the north.
Real rarities are the properties on offer in Formentera, which are being sold for an average of more than 9,000 euros per square meter. This makes it the most expensive island in Balearics.
Menorca – nature and tranquillity
Menorca
The second largest of the Balearic islands has a face of its own. Menorca benefits from having been discovered late by tourism and has been able to develop a more sustainable holiday model. It is an idyllic retreat without the hustle and bustle and media spotlight of Mallorca or Ibiza. Menorca has been a “Biosphere Reserve” since 1993 – 43 percent of its territory is protected. It is the Mediterranean for purists: no party zones, few hotels and, with Ciutadella and Maó, two picturesque capital cities with only small town populations. Attractions include 90 beaches and coves with turquoise water. Or the 185 kilometre long “Camí de Cavalls” (horse trail), which circles the island and brings together hikers, mountain bikers and runners. Culinary delights are also on offer. Buying a holiday home in Menorca means choosing nature and tranquillity, with plenty of opportunities for active holidays between land and sea. The main buyers are Spaniards from the mainland and the French, and demand is very high. In 2022, the number of transactions increased by almost 36 percent compared to 2021.
The general level of property prices is significantly lower than on the other islands.
Average prices per square meter range from 1,770 euros (in Ferreries) to 4,200 euros in the Cala en Bosch/Serpentona are in the west of the island.
Coastal apartments generally range from 150,000 to 400,000 euros. First-class apartments in Cala Biniancolla (southeast/Sant Lluis) and especially in the natural harbour of Maó can exceed these sums, but still significantly. The rest of the market is concentrated in Ciutadella (Cala en Blanes, Cala en Bosc, city centre), Sant Lluis, Maó and Es Mercadal. Village and town houses usually cost between 200,000 and 700,000 euros. The majority of detached houses are priced between 300,000 and 1.5 million euros. Spectacular villas often cost between 2.5 to 7.5 million euros. Country estates are priced between 1 and 6 million euros.
Overview
In the real estate sector, there is a certain degree of uncertainty in some areas with regard to market developments in 2023. Price increases are expected to slow down somewhat. However, given the limited amount of space available and the continued high level of demand, it is unlikely that the market will really collapse. The Balearic property market in particular has been very robust in recent years. This is especially true of the luxury segment. For financially strong buyers, the Balearic Islands remain a safe haven for investments that also promise a very high quality of life.
Are you interested in selling or buying a property on Ibiza or would you like to receive further information about the service of KENSINGTON Finest Properties International – Ibiza? Then get in touch with us today.
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