13-11-2018

The national ministry of development's latest study of residential letting reveals that the average price to rent in the Balearics is nine per cent higher than before the economic crisis.

Using its own data and that from the real-estate website Fotocasa, the study finds that the average price per square metre was 10.40 euros per month in the second quarter of this year. Only Catalonia and the Madrid region have higher prices - around two euros more.

When the economic crisis started in 2008, the cost to rent did begin to drop. In some regions of Spain it is the case that rental prices have not reached what they had been in 2007. In the Balearics there is a different situation, with holiday rental also having been a factor in driving up prices, a phenomenon that has coincided with the growth of websites such as Airbnb. Prior to the "boom" that the so-called collaborative economy created, rental prices - while they might have been high compared with other parts of Spain - had been more affordable and there had certainly been greater availability.

The Balearic government had hoped that holiday rental legislation would result in more availability of accommodation for residential letting and in lower prices. There has been little evidence that the legislation has produced this desired effect.

Only three regions of Spain, the study discovers, have higher rental prices than in 2007. In the second quarter of this year, the price in the Canaries was 3.1% more, in Madrid 5.4% and in the Balearics nine per cent. The greatest fall in price was that of Aragon, where the average price was 28.9% lower than in 2007.