Property prices on mainland Spain are still 37 per cent below their 2007 level before the credit crunch hit. This is quite amazing and clearly underlines the fact that in some cases on the mainland property was exceptionally overvalued. The Balearics continue to outperform the rest of the country and property prices are higher than on the mainland. The market has also recovered much better than other parts of the mainland and prices are close to their 2007 peak. However, I think that everyone agrees that we will never see a return to the boom days of the 2004-to-2007 years when property prices rocketed.
It took Spain a long hard time to recover from the severe recession which followed and in some parts of the mainland, the real estate market continues to suffer. The are many so-called bargains on offer. The Balearics should count themselves lucky. They managed to escape the worst of the recession and the housing market has recovered far quicker than the rest of the country. Prices have been steadily rising both for purchase and rental. I do believe, though, that the local authorities could do more to help the real estate market. The crackdown on illegal rentals has meant that buying a flat to rent out to tourists is no longer possible in some areas. For many foreign buyers this was a source of revenue when they were not using the flat. The local authorities could also promote and underline the benefits of owning a property here.