Sale prices for residential property in Menorca have risen 15% across the island in the last two years alone, according to Engel & Völkers.
The increased level of demand for second homes coupled with a limited number of properties on offer has seen the largest price rises for villas and classic country estates in expensive coastal areas, said Gary Hobson, managing director of Engel & Völkers Menorca.
In the less touristic coastal resorts of Binibeca, Es Grau, Sa Mesquida and Alcaufar, villas are in demand where asking prices ranged from €900,000 to €3 million in 2017.
Country estates (or fincas) with sea access contain the rarest properties, achieving prices in excess of €7 million. The island’s strict building regulations, limited supply and Menorca’s requirement to maintain its status as a UNESCO biosphere reserve, has all helped to increase prices to a premium.
“New construction on undeveloped land plots is prohibited. That is why availability of such homes is limited and they come into the market so infrequently,” said Hobson.
New building development potential currently exists in the cities of Mahón and Ciutadella, and several tourist regions. Prospective buyers here are typically focused on townhouses, and asking prices ranged from €350,000 to €1.5 million in 2017.
Meanwhile, residential properties in the region are particularly popular among buyers from the Spanish mainland and the UK, with demand increasing among buyers from France, German-speaking countries, North America and Belgium. This has been made possible due to the expansion of flight connections, with over 80 new routes featured.
Menorca has also increased its focus on quality tourism, with several boutique hotels attracting wealthy holidaymakers to the island and, in turn, prospective buyers of exclusive second homes. What’s more, the opportunity to offer short-term holiday rentals – in addition to private use – can play a key role for some clients in their decision to buy, says Engel & Völkers.
Due to the limited number of properties for sale and high demand, Engel & Völkers anticipates further price rises in the coming months. This is particularly likely for properties near the coast and fincas with sea views.