On the Spanish island where properties are snapped up by wealthy American buyers: Mallorca prices have skyrocketed by 15% thanks to the influx of Americans tired of economic turmoil at home

Americans flocking to Spain in search of a better quality of life are driving up house prices in the European hotspot, experts say.

In the first half of 2022, 1,162 U.S. buyers came in, up 76 percent from the same period the year before, Spanish notary data shows.

But the trend – driven by wealthy families and retirees fed up with the US economic turmoil – is blowing up the real estate market for locals.

The Balearic island of Mallorca is one of the hardest hit islands, with prices there increasing by 15 percent in the year to June 2023, according to property company Savills.

Similarly, rental costs in the island’s capital, Palma, have increased by 75 percent over the past decade, according to the Spanish real estate website Idealist.

And the wealthiest corners of the island have seen the biggest increases, Savills’ figures show.

The average asking price in Port Andraxt, Majorca, increased from $4.9 million (€4.5 million) to around $5.46 million (€5 million) between 2021 and 2022.

As a result, according to the Colegio de Registradores, about 36 percent of properties sold in Mallorca and neighboring islands were bought by expatriates rather than locals.

Experts say Americans are moving to Europe partly out of frustration over problems at home.

Gloriana Bonillo, of real estate company VDB Luxury Properties, recently told the New York Post“I don’t know what kind of meme has gone out in the US over the last four years, but we’re noticing a huge difference from what’s been happening to Americans since 2019.

“They’re mostly from New York, LA, Texas; they really want to get out of the US because of everything that’s going on.”

She added that these factors included unaffordable expenses such as an expensive healthcare system and problems with schools.

The Balearic island of Mallorca is one of the hardest hit islands, with prices there increasing by 15 percent in the year to June 2023, according to property company Savills. Pictured: A property in Pollensa, Mallorca, is for sale for €5.5 million

The richest part of the market sees the biggest price increases, according to figures. Pictured: A property in Pollensa, Mallorca, is for sale for €5.5 million

Seattle-born expat Jesse Sullivan, who moved to a small town north of Valencia in 2021, also said increased affordability in Spain drove him there.

“Many Americans seem to be moving abroad because of problems at home, namely out-of-control housing prices,” he said The mail.

While inflation is skyrocketing around the world, Spain has fared much better than other countries after taking faster and tougher measures to curb the crisis at an early stage.

Spain, for example, put a cap on energy prices, lowered public transport costs and set limits on the extent to which landlords could raise their rents.

As a result, the annual inflation rate fell to 1.9 percent in June — below the US rate of 3 percent.

Spain is also an attractive destination for expats due to the new, flexible visa rules.

Earlier this year, Spain launched its “digital nomad” visa, which made it easier for remote workers to live and work in the country.

Applicants must meet a number of requirements, such as a minimum of three years’ professional experience and a wage of at least f$2,566 (€2,334) per month.

Expats may also qualify for a ‘golden visa’ – a document they automatically receive if they buy a property for more than €500,000 (or $549,000).

Applicants may also qualify if they purchase shares in a company or make a deposit to a Spanish bank of at least $1.1 million or invest at least $2.2 million in Spanish national debt.

Spain is an attractive destination because the government has suppressed inflation faster than the US or even European neighbors. Pictured: A property in Pollensa, Mallorca, is for sale for €3.9 million

The country also introduced flexible new visa rules for expats. Pictured: A property in Pollensa, Mallorca, is for sale for €5.5 million

Foreign buyers may also qualify for an automatic “gold visa” when purchasing a property for more than $549,000 – or €500,000. Pictured: A property in Pollensa, Mallorca, is for sale for €5.5 million

The initial permit is valid for one year, but can be exchanged for a Spanish residence permit valid for another two years. It can then be extended indefinitely as long as an expat keeps their investment.

Retirees may also qualify for a “Spain Retirement Visa” that allows them to stay in the country as long as they have at least $33,000 in their bank account, have private health insurance and a clean criminal record.

Real estate agent Connor Wilde, CEO and founder of Found Valencia Property, recently noted that Americans are increasingly interested in the “Hispanic way of life.”

He told the Wall Street Journal: ‘We have American buyers every week. I’ve never seen anything like it.’

He added that the majority of Americans want to move permanently and many come with school-age children.

US residents looking to move to Spain should also be aware of the tax implications of the move.

If they want to buy a property in the European country, they must pay tax in advance in the form of a levy known as ‘stamp duty’.

This can be between one and 2.5 percent and must be paid by the buyer within 30 business days of the property changing hands.

Once this amount is paid, however, owners no longer need to worry about property taxes. This differs from the US system in which property taxes are imposed annually.