Wage increases way behind rise in property prices. | Majorca Daily Bulletin reporter

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The price of housing in the Balearics has increased by 44.8% since 2016, while average salaries have increased by just 7.4%, according to the study 'Relationship between salaries and the purchase of housing in 2021' by Fotocasa and Infojobs.

The report also reflects that in 2021, the price per square metre rose by 3.4% and wages fell by 3.6%.
Thus, average salaries in the Balearics, in five years, have gone from 21,961 euros in 2016 to 23,577 euros in 2021, an increase of 7.4%, while the price of housing has risen from 1,996 euros per square metre in 2016 to 2,890 euros per square metre in 2021, which represents an increase of 44.8%.

As for the annual variation of the price for sale and salary by province, in the Balearics the average salary was 24,463 euros in 2020, while in 2021 it was 23,577 euros, a decrease of 3.6% from one year to the next. Meanwhile, the average price of a home was €2,794 per square metre in 2020, in 2021 it was €2,890, an increase of 3.4%.

The Director of Studies and spokesperson for Fotocasa, María Matos, explained that the report "clearly" presents the "major problem" of access to housing in the country, which is that salaries and property prices "have not increased at the same rate".

Matos added that this imbalance has meant that people have to make a "greater effort" to be able to "afford" to buy a home.

Matos also pointed out that in a context of "runaway" inflation, the gap could increase "even more" by making property prices more expensive while reducing the disposable income of households, "if they lose purchasing power due to the increase in the Consumer Price Index".

"The progressive evolution of the average wage in the country between 2017 and 2020 was slowed by the effects of the pandemic on the economy and the activity of companies," said the director of Communication and Studies at Infojobs, Monica Perez, who added that we are currently going through a period of "wage moderation" that, "although it is necessary" for companies to be able to cope with the "difficult" economic situation caused by the energy crisis and the lack of supplies, also has a "serious" impact on the purchasing power of workers "in the face of rising inflation".