Smaller apartments could offer a solution to the housing shortage. | Javier Coll


Latest figures from the National Statistics Institute (INE) show that house prices in the Balearics are rising at a rate that is some 70% higher than the national average. In the second quarter of the year, the INE's house price index in the Balearics increased 5.7%. Nationally the rise was 3.3%. These rises are by comparison with April to June last year, when the pandemic had of course brought much economic activity to a halt.

Since the second quarter of 2020 there have been quarterly increases, but April to June this year was far higher than in the first quarter of 2021 - 1.1% in the Balearics.

INE statistics indicate that house prices have risen every quarter since the start of 2014. The indices for 2007, before the financial crisis, were being exceeded just prior to the pandemic.

The current crisis has not affected the top end of the market, and foreign buyers have continued to show interest in luxury homes in the Balearics.

A housing shortage, of which builders and developers have been warning for years, has contributed to the rising prices. The construction industry and architects are urging modifications of urban plans to allow the building of smaller apartments that will meet demand and will also be more affordable.