Architect image of a luxury property in Mallorca. | Archive


A report on the luxury housing market in Spain, commissioned by Bermuda-based insurance company Hiscox, indicates that 33% of all luxury homes in the country are in the Balearics. Defined as properties valued at three million euros or more, the Balearics - treated as a province - are second only to Malaga and by just one percentage point.

The report observes that Spain is the fourth most attractive country in the world for investing in luxury homes behind the US, the UK and Australia.

For buyers, Spain is "a safe investment and an ideal destination to establish a second residence", especially for foreigners from countries such as the UK, Germany, France and China. The luxury sector, according to the report, accounts for around five per cent of Spain's total residential market.

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The findings from the Hiscox report are similar to figures produced by the property website Idealista in August last year. This showed that 32.1% of properties on the market at three million euros or more were in the Balearics - 2,497 advertisements.

In the Balearics, there is political pressure to limit the purchase of homes by foreign buyers. Around a third of all purchases per annum are by foreigners. While these are not by any means all in the luxury segment, the demand - and this is admitted by the real-estate sector - does act to push up prices of homes in general.

There is also pressure to scrap the so-called Golden Visa. Introduced by the Spanish government in 2013 as a means of encouraging foreign investment, this grants residence status to foreign buyers whose investment is 500,000 euros or more.