The tourist boom in the Balearic Islands was in the news over the weekend. And not because of a big show like a few days ago, or a new measure to stop beach saturation or the overflow of visitors. No. It was in the news because a famous and influential voice spoke out on the subject: actor Michael Douglas. It may seem odd for a Hollywood star to comment on the “tourism problem” in Mallorca, but Douglas is certainly no stranger to the island, where he bought a mansion in the ’90s. The Balearic Islands are increasingly becoming a hot property candy for American buyers looking for high-value homes.

At least that’s what the data says.

Luxury that makes you fall in love on the other side of the lakeIt is not new for North Americans (Americans and Canadians) to be interested in the Balearic real estate market, but this week the market’s thermometer was set. Global Mansiona New York website specializing in luxury real estate.

In a comprehensive report focused on the Balearic capital, the Barron’s Group portal explains that in 2023, around 12% of home buyers in the luxury market of Majorca will be American. This trend is also significant, as Florian Hofer, managing director of Engel & Völkers Balearics, told the New York media: “It has established itself as a growing profile.”

From “occasional buyer” to “regular”. That’s not the only clue that Mallorca’s luxury housing market is attracting interest from American buyers. Another equally revealing figure was dropped on Bloomberg a year ago by Charlie Hill, co-founder of Charles Marlow Property. In a report detailing the growing interest of Americans in the island, Hill shared a revealing figure: Almost 50% of buyers already come from the US.

“The American has gone from being an occasional visitor or buyer to a habit,” he explained. He claimed to have managed the purchase of a former hotel by a New Yorker who was planning to move to Mallorca with his family. But there are other nationalities beyond the US who still hold key weight in the Balearic Islands when it comes to buying and selling homes.

In 2022, data from the College of Registrars of Property in the Islands showed that Germans accounted for 44% of foreign transactions and the British for almost 10%. Equally important, there is another piece of data that reveals the profile and purchasing power of these foreign buyers: that year, foreigners were behind 3.6% of purchases of smaller homes, those under 40m2, but they accounted for almost 48% of purchases over 100m2.

American real estate agents. There is another clear sign. Proof of Americans’ interest in Mallorca is that the country’s own real estate agencies have decided to land on the island. The newspaper reported this at the beginning of the year. Last minuteThree North American capital agencies are mentioned as negotiating for Americans interested in the Balearic capital: Nest Seekers, The Agency or Berkshire Hathaway. Jorge Fortaleza of the latter told Berkshire Hathaway Nova Mallorca: Majorca Diary He said that the American and Canadian markets are already the fourth most important markets on the island for the company.

“An important newcomer”. The new trend was also confirmed by Claus von Benz. “For a long time, the Germans and the British dominated the property purchase market abroad. But now a new trend is emerging,” said the agency, which is based in Mallorca and focuses on luxury real estate on the island.

According to the latest financial services statistics from the Real Estate Credit Union (UCI), 38% of foreign property buyers come from Germany and 25% from the UK. But there is one notable newcomer to the statistics: Americans […]”They were established with a 15 percent property purchase quota for foreigners in 2023.”

The company detects “signs” of growing interest in the US as well as another attractive market, China, which invites it to think about “demand growth”.

Basic data: prices. It’s not just American interest that’s increasing. Prices are doing the same. Idealista tables show that in Palma de Mallorca, the price per square metre has risen by almost 9.5% in the last few years, reaching 4,144 in June. In Son Vida urbanisation, this value is approaching 7,500 euros/m2, while in Portixol-Molinar it reached 6,700, up 12.3% on the previous year. A year ago, Savills was already talking about a 15% increase in prices in a report that placed Mallorca in the top 5 locations for second homes.

As for the price range, although it may not suit every budget, the range is wide. Global Mansion The average cost of properties sold by Engel & Völkers Mallorca in 2023 is €1.88 million, but the same source confirms that the range is very diverse: the average price of a four-bedroom luxury detached house in Son Vida will be between €5.5 and €7 million, depending on whether the villa with garden and pool is new or not, but there have been sales that have reached over €60 million.

A market with a foreign accent. The result of this increase in prices and interest in luxury housing on the island has a clear effect that Bloomberg pointed out a year ago: the real estate market is becoming increasingly untouchable for locals. Data from the economic portal shows that foreigners bought about 36% of the properties sold on Mallorca and neighboring islands, at least in the fourth quarter of 2022.

What is the reason for the trend? The increasing interest of US buyers in Mallorca cannot be explained by a single factor. To understand this phenomenon, you need to consider many things such as the island’s natural charm, climate, the high foreign population in the Balearic Islands, the use of English, and attractive prices compared to other countries. The greater demand from the US and the strong presence of the destination among North American tourists are increasing its visibility in the country.

Although the most private buyers do not travel by regular flights, the real estate sector in general points out that one of the keys to explaining the change in trend is the non-stop connection between Palma and Newark airport, launched a few years ago by United Airlines. This facilitated the union between both markets without the need for several stopovers. “The existence of direct flights made it easier for Americans to invest in property,” says Claus von Benz.

Image | Farid Askerov (Unsplash)

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