Now it is time to invest in real estate in Mallorca!
Interview with Ahmet Senoglu – Partner at Mallorca Residencia
Islander: Dear Ahmet, thank you for meeting us today. Although most of our readers are from the boat industry, some of them are interested in investing in real estate in Mallorca therefore we would like to talk to you about the market and some investment ideas.
I: Tell us about your company and the real estate market in Mallorca.
A: Mallorcaresidencia was founded in 2005 by my partner Vivian Grunblatt a local Mallorcan who for many years split her time between Mallorca and Stockholm. Vivian established Mallorcaresidencia because she discovered that Mallorca lacked an international real estate agency specializing in exclusive properties that would appeal to the Scandinavian buyer. Today Mallorcaresidencia does more sales to Swedish buyers than any other agency on the island.
I: Do you only sell to Scandinavian clients or a specific area?
A: In the beginning, we started with Scandinavian clients and still are the market leader in that segment. After 12 years, we have clients from all nationalities and not only sell Santa Catalina or Palma but most of the parts of the island.
I: How is the real estate market doing nowadays? Are the golden times back again?
A: The global and Spanish financial crisis in 2007-2008 affected Mallorca significantly less than mainland Spain and the island has recovered quickly. The last 4 years the market is developing on a positive trend. Right now, there is more demand than available interesting properties on the market.
I: Why is Mallorca doing better than many other parts of Spain or even southern Europe?
A: It is a combination of things. It has a safe environment, offers not only beaches but a fantastic nature of mountains and country side, a vibrant capital city with great shopping and dining and an attractive life style for many foreigners from other countries. Mallorca has a very impressive infrastructure with quality highways, private and public healthcare and schools. All these together make the island an attractive spot to live in.
I: Which areas are popular among your clients and why?
A: Palma has changed a lot the last 10 years. The transformation started in the old town first which is still a popular area. Then La Lonja later Santa Catalina have been discovered. Now other areas such as Son Espanyolet, Son Armadams, El Terreno and Bonanova are getting more popular. Portixol and El Molinar had a boom in prices, especially the sea front properties. In the southwest we see that Cala Mayor is coming back, San Agustin is on a positive trend that started a couple of years ago. Cas Catala, Illetas, Bendinat and Portals are always popular. These areas are popular among buyers who want to live here all year round. Then we have Santa Ponsa and Port de Andratx with larger estates and more vacation or summer residency. Valldemossa, Deia, Soller and Santa Maria attracts more clients who prefer more rustic style country houses.
I: Why investing in Mallorca’s real estate is a good idea now?
A: In general investing in real estate right now is a good idea because alternative financial products do not offer a higher return. Some banks even charge fees to keep your money in the account. Mallorca’s real estate market is stable compared to many areas due to limited land that can be built. In addition, the island attracts not only one nationality or group. It has a very international market of sellers and buyers. Mallorca has higher prices per sqm compared to the mainland and other regions of southern Europe and attract the premium buyers which is also a stable segment in the whole world. Therefore, the second-hand values of properties in Mallorca don’t drop but go up.
I: How do you and your team help your clients to find the best investment?
A: We have different services and products tailored to our client’s needs. For our private clients who want to live on the island part time or eventually permanently we find properties in the right location, attractive price and features such as large terraces. Then we have clients who want to invest their savings in real estate. In that case, we find properties that can be renovated or rented out. We have a team of architects and builders that help our clients in renovations. Over the years, we had many boat owners, captains and crew members who invested in properties like these. We help also investors who want to develop a real estate product and resell it. I work mostly with these new developments. In short, we have all possible properties or products depending on the client’s interest, needs and budget.
I: Is it safe to invest in real estate in Mallorca? Are they any hidden fees or dangers to be aware of?
A: It is safe to invest in real estate as long as the proper due diligence is made and the whole process is executed correctly. We work as a team with lawyers, banks, architects and the notaries to ensure that all goes smoothly and correctly. We do recommend a lawyer/solicitor for the legal due diligence. If the property is an old one then we arrange surveyors to make sure all is legal or correctly built. If our clients need to renovate or build then our network of architects prepare the proper license applications. Some of our clients need financing from local banks and we know all of them. The real estate purchase process here in Mallorca is not so complicated at all if the right team is helping you. There are specific taxes that come as additional fees. The transaction tax or VAT for new properties, the notary fee and the stamp fees add up to a sum between 10 and 12% of the purchase value. In addition, one might need to add the lawyer’s and financing fees. The real estate agency fee is paid by the seller.
Islander: Thank you for all this great information and tips. Now our readers know where to contact for their real estate questions.
Calle Anibal 23D, Santa Catalina