Rental prices fell 5.3% in the Balearic Islands in October according to the Real Estate website, Idealista.
It was the biggest drop in the country and much more than the national average of 3.6%.
Natalia Bueno, President of the Association of Real Estate Agents in the Balearics says a fall in demand and an increase in supply is behind the slump and that homes renting above the 900 euros a month threshold are the worst hit.
"The most expensive rents are the ones that are going down in price because there are fewer tenants who can prove solvency," she said.
The Balearic Islands were the worst hit economically by the coronavirus pandemic which has put thousands of people out of work and forced many foreign residents to pack up and leave.
"People are returning to their country of origin or moving to places with better job opportunities," said Bueno who explains that owners who wanted to sell their properties have decided to rent them instead because it’s so difficult to find a buyer. On top of that homes and apartments that are usually rented to tourists have also been put on the market as long term rentals.
Since the coronavirus lockdown restrictions were introduced demand for properties with patios and terraces has soared and places that used to rent for 700 euros a month have gone up by 40-50%.
But although rental prices have fallen in Mallorca and Ibiza Idealista says that hasn’t happened in Minorca and Formentera.
Despite a 10% fall in rental prices in the Balearics since the start of the Covid-19 pandemic, property in the Islands still costs 11.9 euros per m2, compared to the national average of 11.2 euros per m2 with only Catalonia, the Basque Country and Madrid costing more.
Rental properties used to be advertised, viewed and signed for within 48 hours, but now it’s taking much longer to find tenants.