International Real Estate: House Hunting in … Spain
International real estate
House Hunting in … Spain
Foreign buyers have long flocked to the island of Majorca, but market forces and global politics are changing where those buyers are coming from.
A Renovated 14th-Century Farm on Majorca
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A Rustic Majorcan Farm on 60 Acres
$7.9 MILLION (6.9 MILLION EUROS)
This renovated 14th-century farm, known as a finca, is just outside Llucmajor, a small town on Majorca, the Spanish island about 130 miles off the Iberian coast.
Set on nearly 60 acres near the southern foothills of the Puig de Randa mountain, the property is surrounded by a stone wall and includes several structures made from local stone, mortar and cement: a three-bedroom villa; a guesthouse and separate casita with one bedroom each; a pool house with a spa; and a fully equipped stable house with two bedrooms. Scattered around the estate are several covered and uncovered terraces, as well as orchards, riding trails, a large garage and a swimming pool.
In a 2017 renovation, the owner replaced the villa’s windows and floors, updated the kitchen, repaired the roof and redecorated, preserving the essential structures and historic character, said Germán Feliu, a sales manager of Sotheby’s International Realty, which has the listing.
“What makes it so spectacular is the location — on a valley surrounded by beautiful mountains, but close to natural sandy beaches,” Mr. Feliu wrote in an email.
A long gravel driveway leads to the property, which is anchored by the 3,700-square-foot villa. The front door opens to a foyer. To the left, in what was once a kitchen, is a den with a brick fireplace. To the right is a library with built-in bookshelves and a stone fireplace.
Straight ahead from the foyer is a long common living area, with wide floor beams and high ceilings. At one end is an open office on an elevated platform. A dining table and a seating area with a fireplace are in the center. A second seating area with aluminum-framed French doors opening to a patio is at the opposite end.
Past the library is the kitchen, with a wood dining table, a marble-topped island with built-in appliances, and doors leading out to the grounds. (The antique, designer and custom furnishings are available to buy, but not included in the asking price, Mr. Feliu said.)
Three bedrooms are upstairs. The master suite, with its vaulted, whitewashed ceiling, has a fireplace, a private terrace and a large bathroom centered around a free-standing tub. Across the landing is another bedroom. A third bedroom, currently used as a yoga studio, is lofted, with a staircase that leads to the ground floor. The bedrooms share a hallway bathroom.
The one-bedroom guesthouse, one of several structures that can accommodate guests, has a bedroom and bathroom, and the stable house has two bedrooms and two bathrooms. The stone pool house has a bar and kitchen, a spa with a sauna and Jacuzzi, and a covered seating area.
The center of Llucmajor, a historic manufacturing town dotted with restaurants and markets, is a 10-minute drive from the property. The area is known for its vineyards, hiking trails, horseback riding and cycling. Puig de Randa mountain, to the north, is a popular climbing and cycling destination. Palma, Majorca’s capital and most populous city, is about 30 minutes away on the Mediterranean coast, and has the island’s only international airport.
Majorca is the largest of Spain’s Balearic Islands archipelago, in the western Mediterranean Sea. A longtime destination for tourists and foreign buyers, it has seen real estate prices rise for several years, in tune with those of the rest of the archipelago, according to a report on the 2019 market outlook by the Knight Frank agency. Since the market low during the global financial crisis of 2008, prices have rebounded by 23 percent, although they are still 9 percent below the peak.
Florian Hofer, the managing director of Engel & Völkers Balearic Islands, based in Port Andratx, said the rising prices are the result of increased demand and the improving quality of the homes on the market.
Overall transaction volume grew from 2014 to 2018, Mr. Hofer said, due in part to Spanish buyers re-entering Majorca’s market as the country’s economy rebounded. But his agency’s share of foreign buyers fell in 2018, after rising from 2014 to 2017, he said, due in part to the unfolding Brexit situation in Britain.
Other agents agreed that British buyers receded in 2018. “They are on hold,” Mr. Hofer said. But some of them have been replaced by buyers from Switzerland and Russia, Mr. Feliu said.
Hanns-Christopher Deppe, the managing director of Dahler & Company in Majorca, said his agency saw a 20 percent drop in online inquiries in 2018, citing Brexit and the trade conflict between the United States and China as “the most important factors influencing the luxury real estate market in Majorca.”
The island’s southwestern coastal communities are its most desirable. According to the Knight Frank report, newly built properties with sea views generate strong demand, particularly those priced from 5 million to 7 million euros ($5.7 million to $8 million). Average prices in the southwest in early 2018 were around 6,250 euros a square meter ($665 a square foot), while inland properties averaged 3,350 euros a square meter ($356 a square foot), according to a report by the Center for Real Estate Studies. Prices are typically lower in the southeast.
In the capital city of Palma, on the Mediterranean coast, Mr. Feliu pointed to Santa Catalina and La Calatrava as upscale neighborhoods where prices of renovated properties run from 7,000 to 10,000 euros a square meter ($740 to $1,060 a square foot).
Who Buys in Majorca
Mr. Feliu and Mr. Deppe estimated that in 2018 around 90 percent of their agencies’ buyers in Majorca were foreign. But as the Knight Frank report did, they noted a change in where those buyers were coming from.
“Majorca has long been a favored haunt of German and British buyers. In recent years, we are witnessing more Austrian and Swiss buyers, as well as Scandinavians, in particular those from Denmark and Norway,” the Knight Frank report said.
Mr. Deppe said that last year his agency’s clients came from Germany, England and Sweden, as well as China and the United States. Mr. Feliu said his agency’s buyers came primarily from Germany, followed by Switzerland, Britain (a decreasing share) and Scandinavia (an increasing number over the past three years).
There are no restrictions on foreigners owning real estate in Spain. Transactions typically involve lawyers and notaries, said Toni Marqués, an attorney with Palma Lawyers in Majorca.
As a rule of thumb, the buyer should anticipate paying an additional 10 to 14 percent of the sale price in taxes and expenses, he said. This includes either a 10 percent sales tax on new construction or a transfer tax on existing property, calculated on a sliding scale of 8 to 11 percent. Stamp duties, paid on new property, are around 1 percent.
Lawyers’ fees are typically 1 percent of the sale price (with a value-added tax of 21 percent on the fee). Sometimes fees are higher, depending on the sale price, the complexity of the deal and the work done, Mr. Marqués said.
Majorca tourism: infomallorca.net
Llucmajor tourism: visitllucmajor.com
Es Baluard Museum of Modern and Contemporary Art: esbaluard.org
Languages and Currency
Spanish and Catalan; euro (1 euro = $1.14)
Taxes and Fees
The annual property taxes on this residence are roughly 1,500 euros ($1,700), Mr. Feliu said.
Germán Feliu, Majorca Sotheby’s International Realty, 011-34-971-721-000; sothebysreality.com
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Published at Wed, 06 Feb 2019 14:31:19 +0000