Over the past year the property value in the Balearic islands has increased by 11.4%, with Madrid being the only Spanish region with a higher rate (17.8%). However, in terms of actual property value, even Madrid does not overcome the Balearic archipelago.
Balearic housing prices have hit a new high, mainly due to the extreme situation of Ibiza where the price per m2 is almost reaching €5,000/m2 in the capital, with €3,583/m2 being the cheapest in the island in Sant Antoni de Portmany. Although also registering an annual increase, Mallorca shows considerably lower prices: the highest in Calvià (just below the minimum of Ibiza) with €3,565/m2 and neighbouring Andratx with €3,161/m2, and the lowest in Vilafranca at €1,150/m2. With an average of €2,682/m2, during the first quarter of 2019 the appealing archipelago is more than 50% above the Spanish average (€1,710/m2).
These circumstances make it quite difficult for residents to acquire their own property, which makes it a good investment choice for people with the necessary means to buy with the intention of renting afterwards.
Due to the high residential demand in the capital Palma, at the moment this area is actually the most dynamic in the Balearic islands regarding the real estate market. Ibiza town comes just after, followed again by municipalities of Mallorca: Marratxí y Llucmajor.
Generally speaking the property value in the Balearic islands has maintained its upward trajectory during 2018. Even if the highest growth rate has been registered in Ibiza, in the municipality of Santa Eulària des Riu (17.7%), the capital in turn has registered a minor 1% increase, a sign that the prices are starting to reach their peak. In Mallorca however, property value seems to keep rising still: 10.4% in Calvià, 9.8% in Palma, 8.9% and 7.7% in Llucmajor.
In both Ibiza and Mallorca, it has been increasingly noticeable that the residential areas of the capital cities are too saturated and therefore more expensive, so the real estate interest has moved to the surrounding areas, especially because the price per m2 can be less than half of what it is in the most expensive areas. Apart from well populated Inca and Manacor mentioned earlier, and the cheapest area in Mallorca – Vilafranca – there are still quite a lot of areas in Mallorca with available land and reasonable prices, like Sa Pobla (€1,235/m2), Porreres (€1,337/m2) or Lloseta (€1,352/m2). It is important to mention that although slightly more remote, these areas are never too far from anything in Mallorca, most of the times within half an hour from Palma or the most exclusive and expensive regions.