Bubble alert: Property prices in the Balearics shoot up another 15%

THE housing bubble in the Balearic Islands has increased even more in the past year, with property prices shooting up by another 15%.

Housing on the islands is increasingly becoming a luxury, with rises in prices multiplying seven-fold in line with the rise of the Consumer Price Index. 

The report by TINSA, a property valuation company, has concluded that flats have become more expensive on the island by 14.4% in only one year.

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This reflects a new acceleration in residential prices with respect to variable rates from the previous trimester. The TINSA report highlighted that housing prices are 25% higher than in 2007 and 2008.

The Balearic Islands and Madrid are the only two places where the price of each metre squared extends past 3.000 euros: in Madrid it is 3.487 euros a metre, and on the Islands it is 3.417 euros a metre.

The report also made clear that the problem is likely to not stop anytime soon, as the real estate bubble swells even more.

The latest figures from TINSA show that the highest year-on-price increases were seen in Madrid, the Balearic Islands, and the Mediterranean coasts (Malaga, Valencia).

Price increases of between 7% and 10% were also notable in the provinces bordering Madrid, mirroring this increase in prices. 

Within the context of Spain’s limited supply of housing, this has led to an acceleration in prices, as the imbalance between supply and demand is not being corrected.

Rising property prices continue to be one of Spain’s main problems, with many locals now being unable to find properties that are affordable in line with their earnings.

READ MORE: Both Madrid and Barcelona have had a housing bubble ‘for the past two years’ – but what’s been driving it?

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