High prices to buy and rent are stimulating demand in Palma's rougher areas.

09-01-2017R.L.

The housing market in Palma, characterised by rising prices in and around the centre, a lack of land for new building and higher rents, is leading to demand in the city's less privileged neighbourhoods.

Despite some dubious quality, the low prices being asked are creating a supply which is being met by the particular demand of younger people who are unable to afford prices elsewhere and who don't want to pay the rents that are being asked for. The cheapest flats are going for between 30,000 and 50,000 euros, and they are to be found in Amanecer, Corea, the Llevant estate and Son Gotleu, where apartment blocks date from the 1960s and 1970s. The price is determined by size, with those in the cheapest range having 45 or 50 square metres.

A further stimulus to this market is the level of conflict between owners and tenants. But as the Proinba association of property developers points out, buyers need to be wary of owners' claims that evictions are imminent. It says that the town hall's consumer affairs department should act in order to prevent any "irregularities".

With rents on average between 500 and 700 euros per month, these cheap flats are attractive, and mortgages are now easier to obtain. Repayments can be much the same as the cost of renting.

In other parts of Palma, meanwhile, prices have been rising to as much as 250,000 euros for a two to three bedroom apartment without a lift. Their quality is also often not what it should be, meaning that building companies are being kept busy because of the demand for renovation.

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