Property transactions in the Balearic Islands have more than doubled in the last five years, according to estate agents Porta Mondial.
The firm also found that holiday properties in Mallorca, Ibiza and Menorca are becoming increasingly popular among foreign investors. It analysed over 6,500 online property offers from the largest brokers on the islands in order to paint a picture of the current market.
Mallorca dominates market supply
Mallorca was home to the richest selection of holiday homes for investors, with around 70% of the properties on offer located on the largest Balearic island. One in five properties is located in Menorca, while Ibiza has a small market share of 8%.
In the northern parts of the island, the Sant Joan region in Ibiza accounts for only 4% of the offers, compared to Mallorca’s north comprising 10% and Menorca at 12%.
Every second holiday home is either upscale or luxury
In terms of luxury criteria, Ibiza reported 80% of the properties on offer having upscale to luxurious furnishings.
The standard of equipment in Mallorca was also high, with almost half of the holiday properties on offer classified as such. However, only every tenth holiday home in Mallorca corresponds to this category.
Menorca is another alternative, with the ratio practically opposite to Ibiza; only 10% of the offers fall under the ‘luxury/upscale’ category.
Ibiza is three times as expensive as Menorca
Interestingly, Ibiza has prices per square metre that are only known on Mallorca in the high-price regions of the southwest and Palma. Prices in Menorca, on the other hand, are relatively similar across the island, roughly the same as in the cheaper regions of Mallorca.
Average prices range from €2,200 per square metre to over €8,300 depending on location and how well the larger property is equipped. The largest price range is covered in Mallorca, while Menorca is in the lower price range due to medium and simple properties. Ibiza, however, is in the upper third due to the many luxury properties.
Front line to the sea justifies high price premiums
As well as the warm climate, holiday properties in southern Europe offer stunning views of the sea, making them heavily sought after.
Together, the Balearic Islands have more than 1,100 kilometres of coastline. The highest surcharges for direct coastal or beach locations were determined with an average of 4,700 Euro/square metre on Mallorca. This situation in Ibiza and Menorca is not as important, according to the study.
"Most of Ibiza’s holiday properties are in a special location anyway and this has already been priced in advance with the relatively high average level,” Prof. Marco Woelfle, head of the study, commented.
Many properties are concentrated in coastal locations and the front line is not as pricey as in Mallorca. From the lowlands in the centre of the island to the front line to the sea, there are many different locations on the largest Balearic island, which explains the relatively high price differences.
Mallorca the best option for property investment
Overall, the study concluded that the holiday property market in the Balearic Islands is well mixed. While Ibiza appears to be less suitable for property investment due to the high prices, Mallorca offers a broad selection.
Meanwhile, Menorca makes a decent alternative for those who are looking for a summer house on a Spanish island at moderate prices.
Thorsten Kaiser, sales manager for Spain at Porta Mondial, said: “Menorca is becoming increasingly attractive for foreign buyers. At the moment the French and British are very active here, but German customers are also increasingly discovering the island.”
He added: “Demand in Mallorca remains high. At the moment we do not see any regional focus in property sales, the finca in the country is just as in demand as the old town apartment in Palma or a house directly by the sea.”
“On Ibiza, demand is currently much higher than supply, and we expect prices to continue to rise here.”