Soller, where property prices have risen the most recently.

07-10-2008Andrew Ede

José Antonio López, regional director for the Tinsa property valuation company, has warned a Palma audience that there could be "serious problems" in the Balearics because of a lack of land for home building and the high demand that exists.

He argued that the government needs to get down to work in facilitating the availability of land. Young people are demanding a first home, but the possibilities for building on urban land are at present "almost non-existent". Supply of housing is decreasing and because of excess demand, a "dangerous" situation could emerge. Rented accommodation, he believed, is not a solution as it simply takes advantage of circumstances.

López was speaking a meeting that was co-organised by the Proinba property development association. It has made regular observations about the lack of land and the scarcity of new and affordable property.

The government (and other public institutions) should cease to be "stumbling blocks" for development. López observed that there are areas of the Balearics where intervention to allow new building would almost be too late. He suggested that there is a will at legislative level to make land available but that "nothing is materialising".

Tinsa data show that the average monthly mortgage in the Balearics is 792 euros; the Spanish average is 543 euros. In the first year of a mortgage, 22% of household income goes towards paying it, whereas the national average is 16.8%.

Of twelve coastal municipalities analysed by Tinsa, Soller was found to have had the highest price increase over the past year - up 21%. Of other municipalities on the coast, the increases in Santa Margalida, Palma and Llucmajor were, respectively, 17.7%, 14.7% and 13.8%.