From tacky to tantalising

Majorca's gorgeous fincas are attracting a new breed of buyer, says Graham Norwood

For many, Majorca used to mean Magaluf, the tacky resort in the south-west of the Mediterranean island where thousands of teenagers clubbed and pubbed on cheap holidays. But now the image is changing - Majorca is going upscale, with the property market leading the way.

For many, Majorca used to mean Magaluf, the tacky resort in the south-west of the Mediterranean island where thousands of teenagers clubbed and pubbed on cheap holidays. But now the image is changing - Majorca is going upscale, with the property market leading the way.

Planning laws regulate new construction where once it was a free-for-all; building regulations, once unheard of, now ensure new homes are of a higher standard than before; huge blocks are no longer allowed; many areas have a quasi-green-belt designation, meaning detached homes must be in large plots to avoid development becoming too dense. An eco-tax is imposed on visitors, cheap holiday lets are restricted in number by law, while new hotels must be four-star or above.

The result? Majorca has soared in popularity among wealthy visitors, including Michael Douglas and Catherine Zeta Jones, and supermodel Claudia Schiffer. Little wonder the island's homes are expensive. Although the market wobbled last year, it rose 10 per cent to 20 per cent annually from 1999 to 2003, especially for old fincas, modern villas, sea-front flats and empty plots with permission to build - the four favourites of foreign buyers mainly from the UK, Germany and Scandinavia.

Fincas - stone cottages and houses dating back centuries and frequently located in relatively unpopulated areas - are easily the dearest. In the pretty north-west town of Sóller, just a tram ride away from an equally beautiful port of the same name, an old finca modernised to provide two bedrooms and two bathrooms, with a large garage, costs €725,000 (£494,400) from Engel & Völkers (020 7351 6767). In a less fashionable village, Fornalutx, the same agent is selling a two-bed finca with a separate one-bed home nearby. The cost is €525,000.

In the north-east, the town of Arte boasts a three-bed stone finca with mod cons such as underfloor heating, sauna, terraces and two carports, plus 3.75 acres of land and a separate apartment. It costs a cool €975,000 from Hamptons International (020 7589 8844). Even at these prices or well beyond, there are downsides. Palma's airport has a flight in or out every three minutes at peak times and many go over the southern half of the island.

On terra firma, there are infrastructure works going on everywhere, especially to widen roads and replace old sewers, so several areas resemble building sites. "It's like Britain 10, perhaps 15, years ago, but it's catching up fast," say Iris and Michael Walsh, formerly of Kent but, since 1991, residents of Santa Maria, north of Palma. "Traffic used not to be a problem, but traffic noise is now an issue in places." Even so, business from overseas buyers is brisk. "German buyers fell away when their economy had problems, but this year they are reappearing in large numbers," says a spokesman for Profi Konzept, one of many German estate agents on the island. "They tend to be buying larger properties than the British."

Most sales to Britons are of apartments in the expensive southern half of the island, although there is a growing market in the north, now being opened up by new roads.

Newly built property is not cheap, but gives better euros-per-square-metre value than restored fincas. At Santa Ponsa, on the coast south-west of Palma, a modern four-bed house with sea views, pool and one-bed guest or rental apartment costs €975,000 from Hamptons. But at places such as Port Andratx, an über-modern marina where $25m Sunseeker yachts vie for attention with their perma-bronzed owners, few apartments grace the windows of estate agents for less than €1.5m.

Palma is home to 50 per cent of the island's 680,000 population, so property near it is expensive, especially if it's not one of thousands of identikit units. A stylish four-bed, three-bath property with laundry and games rooms, terraces and swimming pool is on sale close to Palma for €595,000 from Kühn and Partner (0034 971 228 261).

Of course, the island has not shed its cheap holiday image completely. Architecture on the seafront of the north-eastern resort of Puerto Pollenca is strikingly contemporary, but the shirtless men, burger joints, Boddingtons beer signs and Trotter's Bar evoke the worst of the Costa del Sol, circa 1980. But the new breed of buyer is unlikely to be joining in the garage music and the karaoke blaring out of Magaluf clubs until 4am. Majorca is changing - and fast.