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The First Mallorca Market Report September
2011
A few days ago, we took part in an event held by Banco Sabadell in the Hotel Castillo Son Vida. During this event, the President José Oliu made a clear remark, "We do not live in times of crisis any longer, we live in a new market reality".
Talking to our clients, we come to know the name of this new market reality every day: insecurity. Not long ago a German couple told us they lost a part of their wealth reserve when the shares of an Essen-based energy company lost half of their value within one month. "How should the development of Mallorca properties be assessed?", they asked.
Another client of First Mallorca, a businessman from Munich, told us the inflation rate in Germany was at 2.4 %, thus being higher than the yearly dividends of his conservative stock portfolio - not to mention the return on his German government bonds which leads to a net loss of wealth, even depreciating by a further 25 % due to German withholding tax on shares and bonds. He asked, "How is the situation in regard to Mallorca real estate?".
Such comments are similar to those we hear from British, Spanish, Scandinavian, Russian and French clients, in other words, our clients from more than 20 countries. Some fear exchange rate risks, others fear inflation or bear share markets. We are not financial advisors. We do not promise returns or an increase in value but as founders of First Mallorca, market leaders and with 15 years behind us, we can tell you that just like gold Mallorca has its very own status of economy and security. A sub-prime disaster as in the U.S. or mainland Spain did not occur in Mallorca although its waves were felt. However, interest in the luxury property market in Mallorca increased during the last three years. At the moment, our respective results are just below last year's figures but there are pending sales to be concluded, so by the end of the current year the outcome will be very satisfactory. Present interest and enquiries show a steady and continued rise in demand for property in the right locations. Real estate has in the past enjoyed a reputation as a safe haven in times of insecurity. Our rental department has shown an increase in business from purchasers of property who have the view to both, hold a security they control and receive a benefit from renting, generally achieving an approximate 2.5 % p.a. return on the purchasing price.
We have followed the success of investments our clients have enjoyed and still do with Mallorca properties. Just as with precious metals - benefits are achieved due to the limitation of the commodity. What is really important for us, Mallorca has a "return of the heart" and maybe your health. Its light, the colours, the sea, the climate, the countryside, its spirit and the Mediterranean way of life contribute to many unforgettable moments - the currency of heart and soul. These are also comments we hear every day. This is the closeness we share with our clients and the passion we all experience.
Here are First Mallorca's results of 2011 up to 30th of September:
PROPERTY SALES
Total of Real Estate Transactions: 75,418,000 €
Total Number of Sales: 81
Average Selling Price: 931,000 €
Average Negotiation Margin: 13.5 %
NATIONALITY OF PURCHASERS
28 % United Kingdom
23 % Germany
15 % Sweden
10 % Spain
5 % Denmark
4 % Switzerland
2 % Austria
2 % Belgium
2 % Slovakia
9 % Mix of Northern & Eastern Europe
NATIONALITY OF VENDORS
40 % Spain
37 % United Kingdom
19 % Germany
4 % Portugal, France, Denmark & Czech Republic
LONG TERM RENTALS
Total of Rental Agreements signed: 101
Most attractive price: 750 € p.m.
Highest rent signed: 10,000 € p.m.
NATIONALITIES OF RENTERS
48 % Germany
20 % United Kingdom
9 % Switzerland
5 % Spain
5 % Sweden
3 % Austria
10 % Mix of Eurasia
We foresee a strong demand and positive outcome for the remaining months of the year. Although the current result lies below the corresponding period ending September 2010 (87 sales with a turn-over of 81.5 m €), we have further offers pending closure to advance these 9 months results of 2011.
We are proud to announce the opening of our 5th office which is located in the newly designed Philippe Starck harbour of Port Adriano since 1st of September. Our staff party took place a few days ago (photo above). We would like to celebrate the official inauguration of this office with you and combine it with the launch of our new autumn/winter brochure on 21st of October 2011. A separate invitation will reach you soon.
Warmest regards,
 
Robert Maunder, Heidi Stadler & Team
P.S. The First Mallorca Market Reports appears 3 times a year: on 31st of January, 31st of May and 30th of September
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