Demand for residential property on Mallorca remains at a high level, according to luxury estate agent Engel & Völkers.

The number of sales transactions overall on the market increased by approximately 20% in 2017, helped by interest in second homes remaining consistently strong and rising buyer confidence.

“This positive development is boosting buyer confidence, as they are investing in a continually growing market,” Florian Hofer, managing director of Engel & Völkers Mallorca, said.

The 17 Engel & Völkers residential property shops located in Mallorca witnessed a significant increase in sales in 2017, with the overall sales transaction volume up by 40% on 2016 to around half a billion euros.

Demand for residential property in 2017 outstripped the number of available properties on the market by a considerable distance, with the premium segment of the market quickly developing into a seller’s paradise.

This excess demand has also led to a resurgence in areas that have largely been ignored by investors in recent years, including the coastal resorts of Playa de Palma and Cala Major.

The Mallorcan property market continues to be dominated by overseas buyers, with clients from German-speaking countries, the UK and Scandinavia the most prevalent.

Meanwhile, the number of Spanish nationals showing an interest in property on Mallorca has also increased, with the recent revival of Spain’s economy one of the main drivers behind this.

Nearly half (43%) of all residential sales on the overall Mallorcan market in 2017 were made in the capital Palma. Freehold apartments in the island’s largest city were most in demand, while exclusive townhouses in old Palma saw their average price rise to 3.8 million euros.

Engel & Völkers expects house prices to rise again in 2018, with Mallorca remaining a desirable hotspot for second home buyers throughout the year. International schools, good health provision, a mild climate, improving infrastructure and diverse countryside are making the island an increasingly attractive proposition to buyers, with many choosing to live in Mallorca for the whole year. A well-connected international airport and stable economic and political conditions further add to this appeal.

“With such a high excess demand in mind, we are expecting further price rises for property in the premium segment still to come,” Florian Hofer added. “The ever-dwindling number of available building plots in prime locations will only intensify this upward trend in the future.”