Golden visa changes to boost spanish demand

With property sales already up 29.2 per cent in 2014 over the previous year, and foreigner buyers accounting for 11% of the total, the Balearics are enjoying a purple patch.  However with new legislation to relax the requirements for a 'Golden Visa' and dramatic interest and exchange rate trends, 2015 is set to go down in history, according to Sotheby's.

Alejandra Vanoli, Managing Director of Mallorca Sotheby's International Realty, explains: "Currency is by far and away the biggest influence on Mallorca's property market right now. Thanks to negative interest rates, affluent Germans are currently paying to keep their money in the banks and some would rather see it being put to good use in real estate investment.

"It's been widely publicised that the British pound is at a seven-year high against the euro," she adds, "meanwhile the Swiss Franc soared when the National Bank abandoned its euro peg mid January.  If we consider one of our mid-range two million euro properties, this would have cost 1.67 million pounds one year ago, but just 1.44 million today, 14 per cent more affordable, and 2.54 million Swiss francs one year ago, but 2.11 million today, a saving of around 17 per cent. Little wonder we're getting so many British and Swiss buyers."

Spain is about to become more appealing for Buyers outside of the EU too, with the Spanish government recently announcing a relaxation of requirements for foreign investors to gain automatic residency via a Golden Visa.

Introduced in September 2013, 530 foreigners have been granted a visa so far, with the majority, some 490 people, doing this through the purchase of a luxury 500,000-euro-plus home.  It has earned the Spanish economy an estimated 700 million euros so far, with most coming from China, Russia or - in the case of Arab business entrepreneurs - the USA.

Previously, the visa was granted to the applicant, their spouse, children under the age of 18 and disabled children of any age.  This has now been extended to unmarried couples, economically-dependent relatives and children of any age.  Also, while the economic criteria remain the same, the path has been made smoother with applicants able to start the process upon arrival in Spain rather than applying from overseas.  The visa will also be given within six months even to those who haven't formalised a property purchase, provided they've signed a contract and paid a deposit.   

Alejandra concludes: "We are expecting more non-European purchasers but at the moment Mallorca is still very much dominated by the Brits, who have been coming en masse since the 1960s, the Germans, and the Swedish who also have a long-standing love affair with the Island.