Price rise for Spanish island homes

VALUATION company Tinsa has reported that the Balearic and Canary Islands are the only regions in Spain where house prices went up in April year on year. Prices rose 3.3 per cent against an average 10.5 per cent decline for the rest of the country.    

Daniel Chavarria Waschke, Managing Director of Balearics Sotheby’s International Realty with offices in Mallorca and Ibiza, said: “We made reference to the fact that Ibiza had its recovery in 2012, way ahead of the mainland.

“Meanwhile we said that demand for holiday homes in Mallorca had remained high throughout the ‘crisis’ largely due to the mix of nationalities involved, with more than 80 per cent of buyers being non-Spanish.

“We believed that, at the top end, the worst was over for Mallorca and recovery would accelerate in 2013.”

Daniel continued: “Not only is it unfair to judge Spain as a whole, Mallorca and Ibiza enjoy very different qualities to the mainland, but it is also important to consider that Tinsa values all properties for sale, and that includes small apartments with no views or homes in less exclusive areas of the Islands.

“Our business focuses entirely on the luxury end of the market and I suspect if we were to carry out the same exercise, the ‘peak to bottom’ price falls would come out a lot lower than Tinsa’s across the board 24.5 per cent.”

Market recovery may well be accelerated by Prime Minister Mariano Rajoy’s statement of intent to offer indefinite residency to foreigners buying a home priced in excess of €500,000, significantly higher than the €160,000 first suggested back in November 2012. 

A more detailed draft of the proposal is expected by the summer but there has already been strong interest from China and Russia, nations keen to access one of Spain’s millions of empty homes in return for residence. 

Daniel added: “Each day there is a new rumour about some such law or another.  In Mallorca and Ibiza we do not have too many buyers from outside the EU and I would be surprised, if this new measure becomes law, if we suddenly start attracting many buyers from outside our usual target audience.”