As British Airway’s business airline CityFlyer announces its first ever leisure flights to Palma from London City airport in May, the mood for the 2010 season is relatively upbeat.
Although the travel industry expressed concern for significant losses to the Mallorca tourist industry at the beginning of 2009, recent figures show better performance than expected. Air Berlin, which uses Palma as its European hub, brought 6.72 million passengers to the island last year in comparison to 6.75 million the previous year, but will nevertheless increase its passenger capacity this summer by 10%. The airport remains the third busiest in Spain.
Although the majority of visitors will be heading to hotels, a significant proportion will already have bought their piece of the sun and will be looking forward to spending time in their own apartment or villa on the southwest peninsula. The popular coastal stretch between Palma and San Telmo has a well developed infrastructure and while visitor numbers swell in the summer, it doesn’t shut down in the winter months. The municipality of Calvia has a resident population of 50,777, 29% of whom are foreigners from other EU countries, predominantly UK, Germany, Italy, France and Bulgaria.
Puerto Andratx lies at the westernmost tip of the island, its fishing fleet nestled within a wide, natural bay set against the backdrop of the Tramuntana mountain range. There are no high rise hotels and no beach. Its harbour side is crammed with bars and eateries and its laidback feel has drawn second home owners as far back as the 1970s when the first, distinctive Pedro Otzoup apartment complexes began to spring up on the port’s south facing slopes. A number of residential estates also took shape, including Montport, now a highly favoured residential area with panoramic views towards the La Mola headland and out to sea. Mid level villas on this hillside today fetch €1.75m to €3.5m; substantial villas at the top command €4.5m to €5m.
Despite its prestigious properties, however, the roads in Andratx had become increasingly potholed over the years and almost un-driveable in places. Complaints from local resident associations to the council went unheeded and the situation worsened. Fortunately, Andratx has now moved on, with sweeping changes in the planning department and a fresh look at the problems of failing infrastructure within ten residential estates in the municipality, including Montport, Cala Llamp, La Mola, Cala Marmacen and Can Borras. Work begins this May on installation of mains water and drainage, underground electricity and telephone lines, road resurfacing, creation of pavements and new street lighting. However, the council has sent out demands for payment to cover the costs amounting to €44 million because the urbanisations were never officially recognised thirty years ago.
The bills affect around 2,500 property owners and are based on the maximum area of construction permitted on each plot. Once completed, residents will finally be entitled to council refuse collection but in the meantime, they are faced with sums of €16,000 – €25,000 on average, payable in four instalments over the next two years – and in order to ensure payment, charges have been entered in the registry against all properties concerned.
Renting your house in Mallorca
For owners contemplating renting out their property this summer season, a word of caution. A few miles along the coast, a property owner in Santa Ponsa is facing the prospect of a large fine for renting out his villa on a short term basis without the appropriate tourist licence.
There was a six month window of opportunity when owners of detached properties could apply for a licence but it lapsed on September 30, 2006. Criteria were stringent as to safety requirements and level of equipment, nevertheless, 2,265 villa and finca owners made applications.
In April 2008, Santiago Balaguer, then head of the tourism ministry, confirmed that no further licences would be granted and that 19 owners of detached properties had been fined from €3,000 to €30,000 for renting out illegally during the previous year, with the highest fines based on 20% of projected annual rental income. The majority of these had been discovered and investigated because they had openly advertised online. Twelve months later, only 1,555 applications had been approved and due to lack of inspectors within the tourism department, it was estimated it would take until the beginning of this year to process them all.
At the time, no logical argument was given for restricting further private villa rental other than sufficient existing choice in tourist accommodation, though pressure was mounting from hotel groups. Feeling the pinch of the recession, they have been forced to introduce more and more all-inclusive deals to encourage new business.
Even though private holiday rentals are a stand alone sector which bring revenue to local commerce and are obviously in great demand, it’s unlikely that policy is set to change in the immediate future, especially as there have been three ministers for tourism appointed in as many months. Kate Mentink, head of Calvia council’s department for tourism and foreign residents, has confirmed that in her region, no further licences will be issued. A rental of six months or more is, however, legal, though in both cases 25% tax will be due on your rental income.
Jan Westwood is a buying agent with specialist knowledge of the market in Mallorca. (www.thepropertyfinders.com; +34 971 233 207)
