The rise in housing prices in the Balearic Islands has continued to worsen during the first quarter of this year, registering the third sharpest increase in prices in the country, only surpassed by Madrid and Navarra. In addition, Palma has become the Spanish housing market where this increase has been most notable, according to the latest report published by the appraisal company Tinsa.
With regard to the average price of new and used dwellings on the islands, during the first three months of this year it was 8.4% higher than that recorded during the same period in 2021, clearly exceeding the Spanish average of 6.6%.
There are only two other autonomous regions where this year-on-year revaluation has been more pronounced, which are Madrid, with 11.3%; and Navarra, with 8.5%. On the other hand, those with the most moderate price increases, are Extremadura, with 0.3%; Cantabria, with 1.7%; and the Canary Islands, with 2.1%.
There is one aspect that is underlined in this report, and that is that this upward trend means rain on rain, since Madrid and the Balearic Islands are precisely the areas of the country where the prices are highest. Specifically, it is pointed out that the average value of a residential property on the islands is 2,574 euros per square meter, an amount that only the community of Madrid exceeds, with 2,751 euros. The average in Spain is 1,646 euros. In the case of Extremadura, this price is 835 euros per square meter, that is, a third of what is paid in the Balearic Islands.
Housing prices close to the historical maximum
Tinsa provides additional data to gauge the situation in the archipelago when it comes to accessing a residence: the current price in the Balearic Islands is only 5.9% lower than the historical maximum that was reached during the ‘housing bubble’. This is a unique situation in the whole country, given that in Madrid it is still 15.8% below its historical maximum, this being the second autonomous region in which this difference is the smallest. In the country as a whole, the current price remains 23.6% below 2007 values. As a reference, it should be noted that in Castilla-La Mancha this reduction is 43.6%.
Palma Leads
If the situation in the Balearic Islands as a whole shows a remarkable worsening in the problem of access to housing, the evolution recorded in Palma is even more striking. Because during the last year the value of a property in the capital of the islands has shot up by 11.6%, making it the city with the highest increase in value in the whole of Spain. In this case, only the municipality of Madrid shows a similar increase, with a rise of 11.4%.
In order to compare the case of Palma and Madrid with the main Spanish capitals, it is sufficient to point out that the price in Barcelona during the first quarter of this year was 1.4% higher than at the beginning of 2021, while in Valencia it rose by 6.4%, in Seville by 2.6%, in Zaragoza by 3.8% and in Malaga by 6%.
The Tinsa report also details that the average mortgage taken out in the archipelago is 205,311 euros, the highest amount in the whole country, followed by 203,000 in Madrid, and 161,896 in Catalonia, when the average in Spain is 137,921. In the case of the Balearic Islands, this means having to face a monthly mortgage payment of 909 euros, which is equivalent to 51.7% of a family’s income, a percentage that no other autonomous region comes close to.
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