The price of housing in the Balearic Islands will continue to rise in 2023, both for properties for sale and for rental properties.
This is the forecast made by the Balearic Islands College and Association of Real Estate Agents (API) and Pisos.com. However, Luis Martín, the president of the Balearic Islands Business Association of Real Estate Developers (Proinba), expects prices to remain stable. Therefore, the anticipated economic recession will not have a significant impact on the real estate market in the islands, unlike what will happen in other areas of the mainland.
Ferran Font, the director of studies and spokesperson for Pisos.com, has reported that in some Autonomous Communities such as Extremadura, Cantabria, and Asturias, property prices have already started to decrease.
The forecast is that house prices will decrease next year in rural areas of Spain, but will continue to rise – albeit at a more moderate pace – in tourist areas. The exception, according to the spokesperson for Pisos.com, is Catalonia, where a decrease in property values is expected.
In the specific case of the Balearic Archipelago, it is expected that prices will continue to increase, albeit at a more moderate rate than they did during 2022. Therefore, access to housing will be even more challenging in 2023, as indicators suggest that both sale and rental prices will rise. This estimation is shared by the president of the Balearic Islands College and Association of Real Estate Agents, Natalia Bueno. “The demand for buying and renting remains significant in the islands, although it has decreased compared to the beginning of 2022. Therefore, prices in 2023 will not decrease, although they will not experience significant increases either, and these increases will be lower than the CPI,” she stated.
Why will housing prices continue to rise in the islands?
Ferran Font argues that the value of properties will continue to increase because the Balearic Islands “have their own characteristics: a heavy dependence on tourism and limited territory.”
Between October 2021 and September 2022, nearly 18,000 property transactions were made in the islands. It is a highly attractive region for foreigners, whether to purchase a second residence or as an investment.
One proof of this is that in the third quarter of the current year, one out of every three houses were sold to citizens of other nationalities. “The Balearic market is one of the most tense in the country,” he emphasized, while highlighting that property prices are 15% higher.
Furthermore, he has stated that the Balearic Islands have the highest prices for buying and renting homes among the Autonomous Communities in the country. Regarding rentals, he has highlighted that the supply has decreased compared to the pandemic years when some tourist properties were converted into residential rentals.
At this point, the president of the Balearic Islands College and Association of Real Estate Agents has warned that “if the expected state housing law ends up limiting rental prices in tense areas, the entire Balearic Islands will be included, resulting in maximum prices but a scarce supply of apartments.”
