The average house price in the south-west of Mallorca now stands at 2.11 million euros, after home values rose sharply since the beginning of the year. Compared to the average price recorded in 2016 (1.68 million euros), house prices in the area have actually risen by 25%, according to leading international estate agents Engel & Völkers.
Buyers are particularly interested in new-build apartments, where property prices have seen the largest increase.
Many potential buyers aim to invest more than 8 million euros in their Mallorca home, preferring locations such as Bendinat and Portals, Santa Ponsa and Puerto de Andratx. British, German and Swiss buyers, and increasingly Middle Eastern buyers, are looking to invest in high-end properties with maximum privacy and views of the Mediterranean Sea.
"Prices in the region have risen further in parallel. Compared to the previous year we have seen an increase of 25% in the average sale price in the south-west", explained Hans Lenz, Managing Director at Engel & Völkers Mallorca Southwest.
He added that they "are also seeing a rise in demand for properties over €20 million, including from new source markets such as the USA and Scandinavia."
The company expects to see continued growth in the residential property market of Mallorca's south-west. But demand currently outstrips existing housing stock that buyers actually want. International clients are far more discerning these days. The days when a fair-sized swimming pool and sun terrace would do are definitely over. Amenities such as a fitness and spa area, a home cinema and even wine cellars are increasingly in demand with buyers searching for homes with more than 1,000 square metres.
The buy-to-let market in some parts of the island, especially in the capital Palma de Mallorca, is also very buoyant. According to Spanish property portal Idealista.com, rental prices in Palma have gone up by more than 14%, since Spain's housing market last boomed at the end of 2007.