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Is it a trend or just a temporary drop? We will have to wait a few more months to see what happens, but the reality is that property prices in the Balearic Islands have fallen significantly in the last two months, according to official data.
The statistics of the Notaries’ College leave no room for doubt: the real purchase price of apartments fell by 6.2% in May of this year and by 5.9% in June. In total, a decline of 12% in just two months.
This drop means that a square meter costs 3,104 euros, 554 euros less than in April. A 90-square-meter property was worth 320,220 euros in April, but two months later, in June, the price was 279,369 euros, a saving of more than 40,000 euros. In any case, this drop has only served to neutralize the increase in previous months, which in some months, such as February, reached as much as 24%.
Despite the drop, statistics from the Notaries’ Association leave no doubt that the Balearic Islands are still the region where it is most expensive to buy a home. The average price per square metre in all of Spain was 1,726 euros. The only region that comes close is Madrid, with an average price of 3,037 euros. The next most expensive region is Catalonia, but by a long way, as the average price of a property in this region is 2,171 euros per square metre. To return to the example of the 90 square metre apartment, the average apartment in Catalonia costs 195,390 euros, while in the Balearic Islands it costs 320,220 euros. An average apartment in Spain is worth 155,340 euros.
The fall in housing prices – temporary for now – has no impact on the activation of the market, which is in decline. For more than a year, the Balearic Islands have seen a decline in the number of property purchases and sales. This sector continues to be weighed down by the rise in interest rates, which is now beginning to moderate, as well as by the high property prices that are holding back buyers as their options for obtaining a mortgage become more complicated.
The result is that around 1,000 mortgages are signed every month on the islands, 1,095 last June. As of this year’s figures, 15,445 mortgages were signed last year, compared to 21,653 in 2007, at the height of the price boom. The notaries’ statistics also confirm that Baleaers is one of the few autonomous communities where property prices are already above the peaks reached during the boom years, which were followed by foreclosures due to defaults.
Source: Agencies
