Menorca property market: 4 things to know

Thinking of buying a flat or a house in Menorca, Spain?

Perhaps your project is still at the thinking stage, or you may have already started looking, or even begun the buying process?

If so, you have understood that Menorca is a jewel of the Balearic Islands, a green island with only 5.7% of its surface built up. In 1993, UNESCO declared it a biosphere reserve.

Long overlooked by investors, who looked instead to its two sisters, Mallorca and Ibiza, Menorca has seen renewed interest from foreign buyers for about ten years, many of them from France.

However, tourism in Menorca is quiet and respectful. There are no 5,000-person nightclubs here, no mass tourism and no overconsumption. Locals know it and take their time. The Menorca property market also has its own features, because it is an island, of course, but for other reasons too.

Here is why.

Menorca: a solid property market

By protecting its nature, Menorca also protected its property market. Prices in Menorca have every reason to stay solid, for two main reasons:

• Limits on new building. Limited supply combined with growing demand means rising prices.
• 66% of the island is a nature reserve and will never see a single building project. This further limits the possible supply of homes, but also sets the island further apart from its sisters, which keep on building, and so strengthens what makes it different.

Of course, Menorca was hit by the 2008 property crisis like the rest of Spain, but its fundamentals were the same as today.

Menorca: a fragmented property market

A recent OBSAM study looked at how the island's housing stock breaks down, to find out how many homes are empty and how big the holiday rental market has become. It found that of the island's 50,000 homes, 10% (about 5,000) are thought to be empty, 30% (about 15,000) used for holiday rentals and 60% (about 30,000) lived in by residents.

• The number of empty flats or houses on the island is hard to obtain. It was calculated by counting ruined properties, bank-owned properties and homes in very poor condition. Water consumption in these homes was also analysed, as were receipts for payment of the IBI (property tax).
• The number of holiday rental properties was calculated by cross-checking the homes listed on Airbnb, Homeaway and Niumba with those holding a tourist licence from the town hall.
• The number of homes lived in by residents was, of course, calculated from the number of people empadronadas, that is, registered on the town hall's census.

Menorca: an increasingly international market

First visited in the 1970s by the British and the Germans, the island then went through a long, quiet period with little tourism. In less than 10 years, the number of French tourists grew tenfold, from just over 3,000 in 2011 to 62,700 in 2017. Many of them buy fincas and invest in holiday rental property.

Menorca: a varied property market

Prices can double from one part of the island to another. For example, you will find small, affordable flats in Cala Blanca, Cala Santandria, or even in Ciutadella and Mahón, for budgets under €70,000. For these entry-level properties, expect €1,500 to €2,000 per square metre.

On the other hand, as soon as you look for a property with sought-after features, prices can quickly climb to €5,000 per square metre. This is the case with this sea-view flat in Playa de Fornells (Es Mercadal), 70 m², 3 bedrooms, on sale for €330,000.