The Balearics: One of the Most Desirable Property Hotspots
The Balearic Islands have enjoyed soaring property prices for more than a year, with Mallorca and Ibiza particularly catching the eye of super-rich international property investors looking for a slice of Spanish sophistication.
Currently on the market in Mallorca is a state-of-the-art villa with every internal room and external space fitted with light effects co-designed by James Turrell, whose installations also grace One Hyde Park. Due to the LED lights changing the colours within each inside and outside space of the villa, it has been named Chameleon House and comes with a ?40m price tag.
Every tree, plant and stone at Chameleon House can switch colours in a second and other tech features of the 10-bedroom villa include an outdoor pool with a floor that rises to adjust the water's depth and a swing bridge that converts into seating around a vast roof terrace.
Anywhere else in Spain, the property would stand out like a sore thumb but in the Balearic island of Mallorca, cutting-edge architectural design has become the norm as the island builds to meet fast-increasing demand from the mega-wealthy.
Not only have the Balearics become a luxury party destination for rich foreigners but according to Knight Frank, also as a place wealthy buyers want to live full-time, running their businesses from their island home.
The Balearic Islands, similarly to mainland Spain, experienced 20-30% dip in house prices since the worst of the recession. The islands' property prices rose by nearly 5% in 2013 according to Chesterton's Overseas Research and Lifestyle report. Approximately 25% of property sales in Spain take place in the Balearics, surprising for two tiny islands and Knight Frank have confirmed that 2013 was the best year in a decade for Balearic sales.
Sotheby's International Realty reported similar success. Managing director Daniel Chavarria Waschke said: "Never before have so many ?5m villas been sold in one year. This is record-breaking. The Balearics have the highest foreign resident population in the whole of Spain at 20.1% and it's this nationality mix that keeps our property market so resilient. Germans are still the biggest buyers but Brits are in second place and I expect more Chinese, Middle Eastern and other non-European buyers this year as the law granting automatic residency to investors who spend more than ?500,000 on Spanish property is now in full effect."
The majority of the reported ?5m sales were in the southwest area of Mallorca, around Andratx whereas Ibiza, due to its more diminutive scale has "hot property" all over the island, according to Glynn Evans from Ibiza Sotheby's International Realty (ISIR). The millionaire DJs, celebrities and business types tend to settle in the countryside around villages such as Santa Gertrudis, where their restored farmhouses sell for multi-millions.
Many agents and property owners are now comparing Ibiza to the Cote d'Azur in terms of its glamour and lifestyle appeal to the rich. "Someone commented to me last summer that they'd never seen so many super-yachts on the island," said Knight Frank's Edward de Mallet Morgan. The summer of 2014 looks set to lure even bigger crowds to Ibiza as the tiny island plays hosts to the Gumball 3000 car rally and Class 1 World Powerboat Championships this year, providing an opportunity for villa owners to capitalise on sky-high summer rental demand.
Spain was one of the European countries hardest-hit by the financial crisis and so it is surprising that the Balearics have become a perceived "safe haven" for rich global investors. According to Kevin Reeves from Mallorca Property Partners, "Demand in Mallorca is no longer reliant on buyers from Britain or Germany as it has been historically. There are now wealthy buyers from the rest of Europe, Russia, US and other parts of the world seeking a lifestyle investment in bricks and mortar and they are identifying the Balearic Islands as a key target location."