interviews the founder of the listed "Homes & Holiday" real estate company with its headquarters in Mallorca. Is this vacation destination also a good place to work?
- Why did you choose Mallorca?
Mallorca is one of the largest holiday real estate markets in Europe and it is highly competitive. When we started in 2005 there were around 2,000 active agents and it was clear to us that if we managed to successfully establish our system there we would also succeed on all other holiday real estate markets.
- How long have you been there and how have your customers and the island changed during that time?
In early 2005 we started with a small real estate agency in Artà, in the north-east of the island. During the last decade the island has once more significantly developed - for example ,the infrastructure has been improved by the expansion of the road system. Now I can travel from Arta to Palma in less than an hour, whereby earlier this took 90 minutes. The biggest change, however, has been in Palma. The capital has awakened from its slumber and the old town has been almost completely renovated, great new restaurants and bars have opened and the public is much more international than ten years ago.
Today's customer is much more informed than ten years ago, thanks to the Internet. In the past, people came to the island and were very dependent on the knowledge of the brokers, but today they themselves have precise knowledge of the offers and the prices. We are not entirely guiltless in this development as we were the first real estate agency to rely to a great extent on online marketing. This advantage over the competition exists to this day. Ours is one of the websites with the highest visibility factor on the Internet.
- Are prices and rents going in the right direction?
The purchase prices have increased significantly in the last two years, but we should not forget that Mallorca also suffered from the Spanish real estate crisis. In the years 2009 to 2015 prices increased hardly at all while, particularly in central Europe, real estate prices went through the roof. Looked at from this point of view what we are now seeing is more of a catch-up effect than indications that the market is overheating. With the rental prices, however, it was a completely different situation. Due to the - what was actually illegal – holiday rental of apartments, particularly in and around the capital where around half of the population lives, rent prices exploded.
Young Mallorcans especially could hardly find affordable housing and hotels had big problems accommodating their seasonal workers as the long-term rental market was emptied. With the new legislation, however, the government has now put a stop to this. In Palma, for example, throughout the city holiday rentals are generally prohibited and all other regions are regulated by a zoning plan. These measures will have a positive effect on the rental market and supply is now increasing once more. Although prices are still relatively high, the high price hikes of recent years seem to be at an end.
- How do you see the current political policy of the Balearic Islands?
As a company we are politically neutral. Overall we welcome the efforts of the current government to preserve the island's natural assets and promote sustainable tourism. This also has a positive effect on the price development of holiday properties which are characterised by their special locations. Nobody profits if the last piece of coastline is made inaccessible by construction. The new regulations for vacation rentals are ambitious, but also complicated. We will see how the law is implemented in practice.
- Are the "okupas" really a problem or is this a summer hoax?
Well, the topic has been exaggerated by the media - Mallorca is always good for a headline. But the whole thing also has positive consequences because an adaptation of the law here was more than overdue. I can only speak here for our portfolio, however, as we ourselves had no incidences of squatters.
- Why is the public taken in by false advertising, what can you do?
Some people still think that buying privately is better than using a professional broker although in doing that many more pitfalls are possible. for example, someone in Spain can sell a house that does not belong to him. Not to mention illegal buildings – in this area everyone should be very careful, especially if the price is well below the market level then very often something is wrong. But even amongst brokers there are black sheep as this occupation is not protected in Spain.
Basically, you should check whether the person offering the property is really existent on the island and operates, for example, a real estate business which should be confirmed by a photo. The size of the workforce also provides information about the professionalism of the business. What not all customers know is that Mallorca has a multi-broker system, which means that an object is usually offered for sale by several brokers. It is very important, therefore, to find a broker you trust, as a well-connected broker has, in principle, access to every property on the island. Porta Mallorquina is one of the island's largest real estate companies with nine locations and more than 50 staff.
- Do you speak Spanish, and do you have Spanish friends?
After buying my finca near Artà I naturally learned Spanish, then knowing the language is the key to everything. Over the years many friendships have developed, also with Mallorcans.
- Do you think that the Germans behave correctly and integrate well in Spain/Mallorca?
We have many German-born staff, and most are together with Mallorcans and so are perfectly integrated. There are, of course, exceptions - Germans who retreat to their enclaves and more or less only communicate with Germans, but I have found that most expatriates think of themselves as Europeans and have an open, cosmopolitan attitude.
- Who owns the apartments (main countries of origin) which you offer for sale?
That is very mixed - Germans, British, Scandinavians and of course Spaniards. The majority of the owners are Mallorcans or mainland Spaniards.
- What is the difference between Ibiza and Mallorca?
Ibiza is for a much smaller and due to its high percentage of luxury real estate also significantly more expensive than Mallorca. In addition, Ibiza is much more seasonal than its big sister. In winter the streets are more or less deserted, whereas Mallorca is becoming more and more of a year-round destination.
- Where do you prefer to be?
In the 70's and 80's only Ibiza existed for me, and Mallorca was still the "charladies island", a terrible clichee which was not at all true as I noticed during my first extended stay there. Ibiza is a beautiful island but my heart belongs to Mallorca. In addition, for me as a commuter the accessibility was a very important factorand Mallorca is unbeatable in that area with its international airport and daily connections throughout the world.
- Do you live in Spain or Germany?
Until 2017 I commuted between my finca near Artà, and Munich, but looking after the large property alone was a little too much for my wife which is why we sold the house last year. Since this year we have had a lovely apartment in Cala Bona and spend around four to five months a year there and the rest of the year in Munich.
- Why do so few people dare to leave Germany and move permanently to Spain?
A good question, but I believe that this is due to several factors. For one thing, career opportunities in Spain have not been so good in recent years as the country has been struggling with high levels of unemployment, and overall wage levels are also lower. Then there is, of course, the language barrier. In Germany there are still only very few schools where Spanish is taught and French dominates as a second foreign language in addition to English. We have also had, of course, employees who were just homesick for their family and therefore returned home after a few months.
- Do you see poverty amongst elderly people in Mallorca?
Yes, I find that in Palma the number of elderly beggars has increased in recent years, and for many years Porta Mallorquina has supported the project "Comida para todos", an initiative of the Lion Club Palma.
- Will you spend your old age on the island?
Right now my wife and I are planning to continue to enjoy the best of both worlds even after I retire, and want to continue to divide our time between Mallorca and Munich, but until then there are still a few years to go.
- What accounts for the magic of the Balearic Islands?
Where else can you dive into a completely different world within two hours? For me the Balearics are a paradise on the doorstep of Europe. Whenever I come out of the airport, get into the car and drive to our office in Palma, it is a pleasure for the senses when I see the sea. The colours and the light simply just lift the spirits, even when working.