Mallorca Property Transactions Fall

Mallorca property transaction levels fell by 37% during the 3rd trimester of 2008 when compared with the same period in 2007. While new Mallorca property sales fell by only 20%, completions on second hand homes plunged by 53%,according to the latest statistics from The Colegio de Registradores de la Propiedad.

The difference in sales levels between new build Mallorca property and older houses is probably down to the fact that hard pressed developers are reacting more actively to the current market conditions by cutting prices while private home owners are being much more reluctant to do so.

David Novi owner of Novi Property Mallorca, residential real estate consultants and Chartered Surveyors added "we have maintained for sometime that we are now entering a period where the Mallorca property market is going to operate on two main levels properties that are fairly valued and those where owners are asking unrealistic and unsubstantiated prices". While many of the realistically valued properties will have seen their asking prices reduced substantially others, because of their unique characteristics may not.

David Novi explains, "the best valued properties are not always those where price has been reduced the most. It is very important that each property is examined separately. The price of any particular house may have been reduced because of the personal circumstances of the owner (need to sell to relocate or due to personal financial circumstances) or because there is a huge glut of almost identical properties and little or no demand. Assuming the characteristics of the first are better, it is likely that it will also prove a better long term investment than the unit with a problem of supply competition, that may take many years to rectify, even if the latter has seen it's price reduced the most. Equally a very unique front line property may have seen it's asking price reduced much less but due to it's unique characteristics may well also prove an excellent long term buy"

In a falling market, market research and appraisal of individual opportunities are essential if you are not going to get your fingers burnt!

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