Property sales plummeted by nearly 11% in the Balearics last year and by 14% in the Canary Islands, according to the latest data from the National Institute of Statistics, or INE.
A shortage of properties, extortionately high prices and economic insecurity are being blamed for the slump in sales which appears to have affected second-hand properties much more than new builds.
Property sales were down by 7.5% in Madrid, 2.4% in Catalonia and 3.3% in the Basque Country and by 3.3% nationwide.
Last year 13,951 homes were bought in the archipelago, 10.9% less than in 2018 when 15,665 were sold.
11,389 of them were second-hand properties which is a drop of 12.1% compared to 2018 when 12,964 were sold.
The number of new builds was also down by 5.1% from 2,701 in 2018 to 2,562 in 2019, and insiders say lack of land in municipalities with high demand is to blame.
Foreigners are still buying up large in the Balearic Islands and according to Registrars in Spain 35% of all homes sold in 2019 were snapped up by International buyers.
Experts say o ne of the biggest problems in the Real Estate market is that buyers have to stump up a hefty deposit to buy a property.
To secure a 200,000 euro mortgage buyers need to put down 60,000 euros which rockets to 90,000 for a 300,000 euro loan.
The President of the Association of Promoters, Luis Martín and Natalia Bueno from the Association of Real Estate Agents say lack of funds is the main reason for the slowdown in sales and both predict that the downward trend will continue throughout 2020.
INE figures show that 9,443 mortgages were granted during the first 11 months of 2019, which is a drop of 4.7% from 2018 and the data states that the total loan amount also fell by 5.3% from 1,707 million euros in 2018 to 1,616 million euros last year.
Banks will usually grant mortgages of up to 80% of the value of a property, but buyers still have to pay the other 20%, plus a 10% processing fee, which is a big chunk of change when properties in popular areas cost 200,000 to 300,000 euros.
Real Estate Plan
The Housing Department Minister, Marc Pons has already consulted Promoters, Builders and other Associations about the super high property prices in Majorca and will present his plans for making housing more affordable at the Francesc Quetglas Centre on Monday.
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