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German Investors Fuel Mallorca Property Market Despite Economic Challenges
1. Investor
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Mallorca still of the
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Nationalities of Purchasers
42 % German
purchasers.
16 % British As strange or inappropriate as it might read, the present financial situation
in which Europe and particularly Spain is wrestling with - is one side of the
14 % Swedish
coin. On the other side, the more positive side and relating to the property
10 % Swiss
market in Mallorca, is unquestionably the lure of the sun and
6 % Russian Mediterranean lifestyle. Secondly, we are hearing an old adage our
4 % Spanish parents would have quoted on several occasions during their lifetime -"as
2 % Austrian safe as bricks and mortar".
2 % Czech
Therefore with that thought in mind it has added a third dimension to
2 % Danish purchasing property in Mallorca. That extra consideration is placing one's
2 % Luxembourg cash into the safe haven of something physical, something you control,
can enjoy or rent. In addition to First Mallorca's very active long term
N AT I O N A L I T I E S O F rental division, the company is offering `buy to let´ relating to new deluxe
VENDORS properties in Puerto de Andratx producing a return of up to 4.3% at prices
starting from 375,000 € for a 120 m2 2 bedroom 2 bathroom apartment
34 % Spanish
with garage and superb community facilities; see reference 52832.Of late
26 % German
the most asked question of course refers to the health of the Mallorca
22 % British
property investment.Clearly the most relevant fact to understand is that
4 % Swedish one must not confuse the property market of mainland Spain to the
2 % Austrian situation of Mallorca. It is related only by being under the umbrella of
2 % Brazilian association.
2 % Danish
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Business
Mallorca is un individual product.
And has never been building developments in excess of demand. Mainland Spain on the other hand
constructed massive blocks of characterless apartments along its coastline, relying on unsecured bank loans
based on pure speculation rather than intelligent market research. Even during the 2005-08 construction
period the old 'hard sell' philosophy and lack of pleasing architecture was wearing thin. In many cases the
property purchase agent quoted a monthly mortgage rate rather than the selling price. For several
considerations that development policy was seriously flawed (we wrote about it as long ago as 2006). The
mismanagement of many Spanish banks' mortgage departments is
now well documented. However, prior and therefore unrelated to these
To stimulate the market, the Government incentives, the period following the 2011 Christmas
Spanish Gover nment has holiday First Mallorca enjoyed both a record number of daily website
introduced two tax visits and an increased number of enquiries compared to the previous
incentives. Applicable to year. As a result property viewings showed increased activity and have
purchases during the continued at a very satisfactory pace to date.
remainder of 2012 the Capital
Gains Tax when re-selling will Clearly the lure of the warm Mediterranean sun and lifestyle is not to
be subject to a 50% be underestimated even in a depressed European economy. Our
reduction. No date limit on results from january 1st January to 31 May 2012:
when the property is sold. In
PROPERTY SALES
a d d i t i o n , t h e VAT o n
purchases of new properties
Value of Property Transactions: 42,983,370 €
is currently reduced to 4% Number of Sales: 50
from the original 8%. Average Property Price: 859,667 €
Average Negotiation Margin: 11.49 %
Most Valuable Property Sold: 4,200,000 €
Most Affordable Property Sold: 80,000 €