HOLIDAY RENTS TAKE A BIG FALL IN MAJORCA

Joan Collins
A study produced this summer on a sample of 100 holiday apartments for rent situated on the western coast of Majorca between Illetes and the Port of Andratx reveals a “continuous” fall in demand, which has forced the owners to reduce prices by up to 25 percent. The study was done by the Official College of Estate Agents (API). The holiday apartment market represents 5 percent of the total property handled by estate agents, who represent the owners of these properties (80 percent of whom are Spanish and 20 percent foreigners from European Union countries) in spite of the fact that the commission is small (10 percent of the total) in comparison with their other activities, according to a spokesperson for “private lettings”. The analysis of the Official College of Estate Agents on 100 coastal apartments came to the conclusion that there was only a 60 percent occupation in June. This rose to 75 percent in July, and predictions for August and September are 90 and 60 percent respectively. The average prices paid by tenants varied between 2'000 and 3'000 euros per month, although these prices were reduced by up to 25 percent due to the lack of demand, according to the spokesperson. Estate agents normally have a fixed portfolio of clients for whom they let out property, in spite of the fact that the demands of the job are not always adequately compensated by the commission. The professionals explained that they have to make sure that the flat meets all the legal requirements, take care of the maintenance, and draw up a detailed inventory of the equipment for the clients. In addition to this, they said that many of the owners prefer not to go through an estate agent but to put their property directly onto the letting market, whether through advertisements in the press or via the internet. The private holiday letting market is also inclined towards anonymity as the income is not always declared to the Tax Office. “It is starting to become an overspill activity due to fierce competition from hotels and tourist complexes”, explained the spokesperson for the API.