If you thought recent price rises in the London property market were impressive then you’d best think again. As a small Spanish island in the Balearics is currently outpacing even the priciest boroughs in the British capital, such as Chelsea and Kensington, with property prices on Mallorca surging by nearly 16% in the last 12 months, according to international estate agents Chesterton Humberts.
Britain’s capital city isn’t the only property hot spot in the world at the moment. As according to the Chesterton Humbert’s report other locations such as the Cote D’Azur, Barbados and Switzerland have also experienced serious price growth over the last year, with little Mallorca leading the way.
Just as the property market in London has been fuelled by investment from overseas the picture is much the same in Mallorca, with interest primarily coming from the German, Russian and Swiss markets – as well as from the UK. British buyers, buoyed by the recent improvement in the domestic economy, low interest rates and rising house prices in the UK, are now turning to overseas property as a viable investment once again, with Mallorca very much on their radar.
And whilst property prices across Spain as a whole have fallen since the onset of the crisis in 2007 certain pockets, such as the top end market in Mallorca have remained largely unaffected, driven by both rental investors and retirees. As a result prices on the island have now risen by 38% since 2007, whilst in the last 12 months the 16% rise in price has outstripped other markets, such as London. With the level of foreign investment estimated to have doubled over the last five years, now accounting for some 30% of all transactions on Ibiza and Mallorca during the course of 2013 alone. A figure reflected in the fact that over 18% of all residents of Mallorca are now of non-Spanish origin.
All of this of course makes very happy reading for the thousands of overseas owners of holiday rental properties in Mallorca, who not only enjoy excellent rental returns from their properties but also substantial capital growth.