Mallorca sees “unprecedented” demand for off-plan property

Mallorca is seeing “unprecedented” demand for off-plan property, as the island’s new build market thrives.

The latest data released by the Balearic Islands statistics office (IBESTAT) shows that the number of applications for new build residential projects rose 55 per cent in the first two months of 2016, compared to the same period of 2015 – the largest climb of the last 10 years. Indeed, Spain’s new build sector slumped in the years following the global financial crisis, as construction of housing fell and parts of the country saw large volumes of unsold inventory.

Engel & Völkers reports that at the start of 2017, premium projects are continuing to launch, driven by the demand for new property and off-plan units.

One of the most dynamic regions for this real estate activity is in Mallorca’s Southwest where many foreign investors buy on the island, says Hans Lenz, Managing Director Engel & Völkers Southwest.

“Over the past five years mainly overseas investor demand for new off plan projects has increased twofold in this region and many projects have successfully sold within weeks of launch,” he comments.

“In today’s market new construction is at a premium which can add anything up to 20 per cent on the value of the property. Consequently developers have been quick to satisfy a gap in the market for quality new projects that incorporate modern architecture, design, latest technology and premium facilities.”

Engel & Volkers’ sales figures indicate that the average price of property sold in the south west has jumped from just over €1 million in 2015 to €1.6 million last year and many of the new developments are priced to satisfy this market segment.

The first major new development to be launched this year in the south west is New Folies in Puerto Andratx, one of the island’s prime real estate hotspots. Prices start from €1.5 million for a 3 bedroom, 3 bathroom (plus WC) with 295m2 constructed area plus garden, pool and terrace. Construction will start imminently with the completion date scheduled for summer 2019.