The average price of new and used residential real estate in the Balearic Islands has risen during the last year by 6.8% to 2,592 euros per square meter, according to the report published by the appraisal company TINSA. This last figure is particularly relevant for two reasons. The first is that it is the second highest value in Spain, only surpassed by Madrid with its 2,811 euros. Not even Catalonia (2,113 euros) or the Basque Country (2,278 euros) face such a serious problem of access to a residence. But the second factor is equally significant because the islands are the autonomous region with real estate prices already closest to the historic highs recorded during the ‘real estate bubble‘. Specifically, the current values of the archipelago are only 5.2% lower than those paid before the 2008 crisis, a unique situation in the country as a whole, because the second place is occupied by the community of Madrid, and there the current average value is still 14% lower than those historical maximums. With an additional difference: the average salaries of the archipelago are appreciably lower than those of the latter autonomous region.
With regard to the evolution of prices over the last year, the Balearic rise of 6.8% has become somewhat milder than that of Spain as a whole, at 8.2%, and is at a considerable distance from the 12.1% rise in Madrid and 10.4% in Aragon. The most moderate increases were in the Canary Islands, with 2.2% and Cantabria with 2.8%.
Prices reflect problems to access residential real estate
But as indicated, the 2,592 euros per square meter paid on average in the Balearic Islands (it should be remembered that this includes both newly built and second-hand dwellings) reflect the problems that residents on the islands have in accessing a property.
This fact is noted by TINSA, highlighting that the islands are experiencing the “most extreme” situation, since “a local buyer would spend more than half of their disposable income (53%) to pay the mortgage payment”. As an example, in Madrid this percentage is 37.4%.
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