Property, especially property in Majorca, has always been seen as a good investment. Yet it would appear those who are not economists are treating this time as a cautious time to buy. Although figures released by Estate Agents across Europe show that Property in Majorca remains one of the most buoyant and flourishing markets in Europe.



The more astute person will realize that in an 'unsteady economy' there are several panic buttons pressed; and I refer specifically to both the property seller and the property buyer. What happens is two fold ... allow me to explain further.

First the buyer becomes cautious. They hear several comments and cannot comprehend exactly what they mean. They are listening to views from others who are also confused. This mass confusion instigates the pause button or a panic button to be pressed and the buyer backs off from making any decisions. Perhaps they will leave it for this year and start looking again next year.

Generally speaking all a buyer wants is a property in or around the location they've decided to buy in. The other main factor in making their decision is that the property will have a good resale value and be seen with 'time' as a good investment.

The opportunity to secure a good investment is never been so good ... and that is because the seller is also pressing the panic button.

The seller panics ... mainly because their decision to sell is during a slump. It happens everywhere in the world ... when there is a property slump the buyer reduces their property price by more than the market needs. They do this to increase their chances of selling amongst the smaller number of buyers buying.

The seller instead of accepting a possible variation of asking price of say 20,000, they increase this variability to 50,000 or even 100,000. This will happen with both resale property and new builds.

Taking property in Majorca as the example in this scenario ... in a so called property slump Majorca remains buoyant. Why? It is mainly because Majorca itself is a sought after holiday destination. It always remains in the top few property buying hotspots year after year whether there is a boom or slump.

So when all the buyers are backing off through uncertainty, the sellers are pressing panic buttons. The property prices are reduced and the buyer that has nerves of steal captures a real bargain.

I am sure many will have seen 'new resorts' being built and the publicity and expectation being excellent. Yet if this new resort doesn't get the infrastructure correct the property variations can be enormous. Majorca however has been a popular destination for 50 years and will remain as a buoyant property market. Meaning that an investment in property in Majorca is safe and secure.

I'll give you a quick illustration of what's happening with the property prices. In this particular example in 2007 a 4 bed villa in Majorca was valued at £400,000 (560,000 Euros approximately). In theory if the same property was up for sale in today it should be still valued for sale at £400,000. Yet to buy it in Euros with the poor exchange rate the actual price should be 480,000 euros. But ... because the panic button is pressed they reduce it further than the exchange rate difference, and ask 400,000 Euros.

It is a buyers market and there are some bargains to be had!

Copyright (c) 2008 Phillip Booker