Balearic property prices go through the roof

Property prices have gone through the roof in the Balearics over the past year. While new property prices have risen by nine percent in the region, potential “used” property buyers are being presented with prices 24 percent higher than the cost of the same property last year. The Balearic increase is the highest in Spain and while the property market claims that house prices have slowed over the past three months, the continual demand for property in the Balearics is fuelling the sustained increase in house prices. The national average increase for “used” property prices is expected to level out at around 14 percent for the year, some ten percent less than Balearic property prices, where, if anything there is a shortage of property, not so much in the domestic market where it is becoming increasingly difficult for people to meet the high property prices, but on the foreign property market which is fuelling the annual rise in the value of property. In some sections of the property market politicians claim that the Balearic increase in house prices is “artificial” because the price hikes are the result of foreign and external market forces, but unless restrictions are introduced on foreign property sales, property prices will continue to rise. New housing, on average, in capital cities, costs 215'800 pesetas per square metre and used housing 171'200 pesetas, however in the case of Palma, an extra ten percent can be added per square metre in the used housing market.