Down to earth property prices are driving foreign sales in Mallorca, the Spanish island already benefiting from its unique charm and balanced supply. Spain’s construction sector remains grim, but the appeal of Mallorca should fuel future development along with broader recovery for the hard-hit nation. See the following article from Property Wire for more on this.
The Spanish island of Mallorca appears to be leading the real estate recovery with developers reporting increased sales and interest due to realistic price corrections.
British developer Taylor Wimpey de España said that 2010 has seen increases of up to 50% in sales from last year and Mallorca that has played a major part in bolstering the figures by doubling their year on year sales.
‘Sales to foreign buyers have been driven by the price adjustments that the Spanish market has seen. For example, in Mallorca properties have seen reductions of up to 25%. Taylor Wimpey de España has of course followed the market closely and worked with the market conditions to maintain a buoyancy of sales which has proved effective,’ said Javier Ballester, Managing Director of Taylor Wimpey de España.
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‘We are now looking at launching more developments to keep up with the current demand. Mallorca has seen particularly positive figures due to two important factors. Firstly, we were not hugely overstocked as the recession hit so the supply and demand was always in our favor. Secondly, Mallorca is still considered a unique place and in many ways superior to some of the mainland destinations,’ he explained.
‘Taylor Wimpey de España prides themselves on selecting development areas that have not been over exposed and still retain a great deal of Spanish charm,’ he added.
According to Spanish press reports, Gabriel Oliver, President of Proinba, a Balearic developer’s association, developers are very pleased with sales this year. He said they expect to close the year with 4,000 new homes sold, reducing the inventory of new homes by 2,000, or 34%. As a result there may be demand to start building new homes again in the second half of next year.
Oliver believes that real estate prices on the islands have now hit bottom after declining 15% since their peak in 2008. He said that getting the price right is the key to a recovery in the country’s hard hit property market.
But he added that developers can’t reduce prices much more as that would mean selling well below cost price and would result in developers going bust.
But Spain’s construction sector is not so upbeat. A recent survey of the building sector in Mallorca by the Gadeso Foundation found that 95% of businessmen in the construction sector say that business is worse than it was four months ago, some 81% think the economy is still in recession, and 87% think that it will be worse next year.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.