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Mallorca is the Most Eco Friendly Property Market in the Med

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February 1, 2010


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Successful property markets are all about sustainability: solid capital appreciation driven by their own ecology of controlled supply and steady demand which is why Mallorca is probably the most attractive eco-market in the Med.

It may not have looked like it while property prices on the high-octane Costas were taking off and developers couldn’t build new apartments and villas quickly enough.

The best thing that ever happened on this beautiful Balearic island were its uncompromising planning laws.

Two questions for you to chew on, those of you who have any doubts.

Can you imagine Mallorca today as just another coastal concrete jungle, oversupplied in every scenic nook and cranny with row upon row of dodgy apartments, most of which would now be lying empty and dragging the rest of the market down the ones that ever got finished, that is?

And can you imagine the damage to the environment that would have been caused by the inflation of such a cheap and tawdry property balloon ? and even worse, by the enormous mess of unfinished developments, unpaved roads and obliterated coastline when it finally burst?

It doesn’t bear thinking about. So yes, while there’s a consensus that the real-estate business here has just been through two of its most torrid years in a generation the reality is that it really could have been so much worse.

As if to illustrate how much worse, just look at these recent research statistics from BBVA (Banco Bilbao Vizcaya Argentaria), Spain’s second-largest bank:

  • Spanish property prices rose by a massive 288 percent over the ten years of the boom, from 1997 to 2007
  • As a result, the value of the country’s housing stock reached €5.3 trillion at its height
  • That value has now fallen back to €4.5 trillion today and continues to fall
  • And even more remarkably, land prices a key driver of house prices ? rose by an average of 25 percent a year during the boom, more than double the rate of increase of house prices, and more than nine times the rate of inflation per year!

Perhaps what’s needed is a little perspective. And that’s what the Mallorca market got recently in a substantial new report from estate agents Engel & Völker.

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Peter Cluskey

Peter Cluskey

An Irish journalist who worked for some years as a war correspondent for the national television station in Ireland – RTE. In recent years, he has specialised in writing about the real estate market worldwide – focusing particularly on the luxury second home destinations. He is a sought-after contributor to a number of international property publications, based on his reputation for well-researched and excellently written articles.