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Spain: Mallorca: Safe Haven – or is it? - Sarah Drane, Purple Cake Factory

Mallorca – the Safe Haven Amongst Spanish Turmoil – or is it?

From my vantage point on the deck of a 50-metre billionaire’s yacht surveying Mallorca’s most-treasured marina, Puerto Portals, you could be forgiven for believing that this Balearic Island had remained resolutely immune to a global recession. That Mallorca’s real estate agents were right, prices had only dipped by 10% or 20% in ‘rare’ motivated cases, and that yacht sales were moving swiftly at the many top-marque brokerages lining the quayside. But, beneath this brave façade, the crisis is creeping up on Mallorca and, although no self-respecting businessman would breathe the word, ‘bargains’ are beginning to appear…

Some ear to the ground research confirms my suspicions. The cracks are already there. One estate agent confessed they’d only sold four or five Spanish properties this year, barely enough to pay the bills. Another had been laid-off from a household-name agency alongside several of her colleagues. A yacht broker laughed and pulled a face when I asked how business was going. The message is clear; if you have the finance, make hay while the market declines…

So what’s on offer at this Mediterranean wealth-magnet? Ten-year established Vitesse Yachts has a number of below market value suggestions including a 2004 Fairline Phantom 50 priced at £280,000 ex-tax. £340,000 would probably be a reasonable valuation in today’s climate. On land a well-located development within view of a prestigious marina is rumoured to be accepting of offers around 400,000 euros for three bedroom apartments advertised in the high 600s (You’ll have to contact me privately on that one!). Meanwhile Taylor Woodrow has slashed 100,000 euros off asking prices for golfside townhouses close to swanky Andratx leaving them just shy of half a million. And then there’s a whole raft of private vendors who are happy to manoevure on price if pushed – unless of course you’re sitting on a unique multi-million euro pile in Formentor in which case your price ain’t going nowhere.

The Mallorca story does however contrast strikingly with the woes of other parts of spiritless Spain. In property terms this Island has the advantage of lower unsold new-build stock, less historic exposure to the excesses of speculative development and investment booms characteristic of the mainland plus a strong ‘brand’ amongst international lifestyle visitors. Therefore there remains a ‘floor’ under the market and bargains will only go so low, and stick around for so long. After that, it’s pedal to the metal once more.

By the way, the billionaire’s yacht is yours for the princely price of offers around 30 million euros, not that it’s for sale, the owner’s not quite feeling the pinch like the rest of us.

Sarah Drane

Sarah is the proprietor of Purple Cake Factory, an Award-winning company that specializes in real estate, marine and travel PR.

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