THE cost of housing in the Balearics continues to soar, and in the past seven years has risen by 214.8 per cent, compared to the national average of 143.5 per cent, according to Tinsa, a real estate assessment firm.
The cost of new homes rose by an average of 17 per cent last year, one and a half points less than in 2003, while older houses rose by 19 per cent, more than two percentage points above 2003.
The figures were obtained by Tinsa through evaluations carried out during the last quarter of the year, which revealed that the average price per square metre of a home is now 1'882.49 euros.
Luis Leirado, the director general of Tinsa, said that the evolution of average prices had varied from region to region.
However, yesterday, Maria Antonia Trujillo, the central housing minister, claimed that the slowing down of increases was due to the measures adopted by the government, based on the promotion of subsidised housing and rent.
Last year, Tinsa carried out 1.6 million evaluations, 15.7 per cent more than the previous year.
The figures provided by Tinsa do not coincide with those provided at the end of last month by the tax office, based on rateable values, which calculated that the average increase last year was 11 per cent.
According to the property market report by Kühn and Partner, the Balearics and Majorca in particularly have now become established as the most chic locations to own a holiday home in the Mediterranean.
The report says that in a recent global house index report, The Economist magazine placed the Balearics third worldwide behind Hong Kong and South Africa for house price increases.
It went on to say that Germans are investing more than in previous years, while Spaniards, Swedes, Dutch, Swiss, French, Italians, among other nationalities are showing great interest and the British continue to purchase with force.
As to choice of area, the Calvia market is still predominantly British with more Germans coming back; the British, Germans and Scandinavians show interest in Andratx, while Son Vida is also much in demand.
Cala d'Or is proving to be popular for holiday homes, while the British are the predominant customers in Soller and in Pollensa and are showing interest in the Arta area.
The main clients in the centre of the island are Spanish, British and German, the report says.