Real Estate

A HOME IN MALLORCA IS ON TOP OF THE LIST

The lack of flights never stopped property buyers during the pandemic. They came to Mallorca in private planes and chartered aircraft. ''About 90 percent of those who visited Mallorca to view real estate when travelling was at its lowest, ended up buying'', says Hans Lenz, Managing Director of Engel & Völkers, Mallorca Southwest.

Lockdowns have made the world value life more.
Many of us seem to ask ourselves ”where do we really wish to be?” 
 – People take out their savings to use them on something they can really enjoy – such as a home in Mallorca, says Hans Lenz, Managing Director of Engel & Völkers, Mallorca Southwest.

At the top of the real estate tree on the Balearics, Engel & Völkers have a large network of offices and agents. They reside in elegant modern offices with white facades, and the staff is friendly and efficient. 

 Estate Mallorca Magazine met one of their newest agents, Bela Almström Alonso-Castrillo. She was recruited just a few weeks ago, and already she is showing clients amazing properties, such as a round penthouse with 360 degree views at 11,8 million euros.

Bela Almström Alonso-Castrillo.

– My office has a great team of professionals who want to help others. I felt at home here immediately, says Bela. 

 Hans Lenz, Managing Director of Mallorca Southwest in Puerto Portals, the area that sells many of the the most expensive Mallorcan properties, has welcomed Bela with open arms.

 – We have properties in all price ranges, but it is true that we have some expensive estates for sale too, some of them are finca mansions, and most of them are secret estates, says Hans. 

Not only are there some stunning places on the market, but people are buying them too. The average sale at Engel & Völkers was 1,6 million euros in 2020, that is more than the 1,5 million euro average in 2019. Sales went up during the lockdowns, contrary to speculation. 

– We had less activity in 2020, but we had a higher closing rate, explains Hans Lenz. 

– Our clients come out of lockdown deciding that life must be enjoyed. Savings should be used. Now that we are seeing an increased number of flights arriving to the island, we expect more people to follow. We have 3000 listings, but they are decreasing rapidly and people who own properties seem to be hanging onto their homes too … 

The Germans are buying more than other foreigners at around 50 percent, the Brits are buying about 20 percent of the properties, and the Scandinavians 10 percent. The rest of the foreign market is a mixture of different nationalities. 

The property market is making positive noises, but most other business sectors are sadly struggling. 

– The hoteliers in the ”German” areas of Mallorca sound a lot more positive about business than the ones around Santa Ponsa, for example, who have a lot of British clients, says Hans. 

Hans Lenz.

– Tourism and retail are business sectors that have been severely shaken up. We have an opportunity now to reinvent ourselves and to push towards a new future. Repositioning the island is what many business sectors are talking about. 

– We need to ask ourselves if we want more and more people at larger and larger airports, or if we want to create a different future, says Hans.  

Can you give us an example of how the property market can adapt to a different future?

– We are working on several hybrid forms of real estate and tourism, for example, where a hotel can be owned by many people,who each own a room or a suite that they use at leisure. When the room is free it can be rented out as part of the hotel business, operated by the hotel. There might be a 51% owner of the hotel, and the rest of the rooms are sold to people who use them as they wish, and earn money on their investment when they are not there. 

 This is not time sharing, as the owners of the hotel rooms actually own the rooms and can sell them if they wish. 

 – Another example of fractional ownership would be to have four families with 500.000 euros, who either know each other or not, come together and buy a 2 million euro finca to share. Agreements would be organised on who goes to the finca at what time, and the owners can sell their share when they wish. 

Mallorca is in need of affordable housing, especially for younger people on the islands. Are some older hotels possible for projects like that? 

– There are a lot of social housing laws that haven’t changed here since 2007, says Hans. 

 – It’s a hot potato that gets passed around. Developers would like to contract housing at affordable prices, but it is economically impossible to build at prices round 200.000 € with the current cost of land and the existing building parameters. Politicians are screaming for money, but I think there will be an opening for foreign investment. 

 – The hotel sector is opening up to transforming third and fourth line hotels into affordable housing projects. We also have a lot of new types of tourism such as winter tourism, health and treatment tourism and tourism for the third age. We need to think out of the box to create a new reality. First the pandemic put us in a state of shock, then we began to feel hope and next we have reached reality where we need to deal with the new situation at hand.

Text: Charlotte von Proschwitz.
Photo: Thomas Engström.

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