New housing construction has been reactivated

New housing construction has been reactivated in all the islands due to the increase in local and international demand. | M.BARRO

Majorca Daily Bulletin reporterPalma31/12/2021 09:03
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The price of housing (new and used) rose in the Balearics by 9.3% this year, this is the highest increase across the whole of Spain according to the appraisal company Tinsa. The increase in Spain as a whole was 4.3% and the price per square metre reached 1,470 euros per square metre. In the year-on-year comparison, the increase was 8.4% year-on-year in the fourth quarter of the year alone, driven mainly by the Balearics and the Basque Country, where prices rose by more than 12% in the fourth quarter.

Strong local and international demand explains this upward trend in prices in Mallorca and the rest of the Islands. Compared to 2019, the year used as a reference because it is prior to the pandemic, prices increased by 7 % after a certain moderation in growth began then. "The savings of private households, consumer confidence and new housing needs discovered during the confinement have driven demand, mostly with the purpose of habitation, although there is also a professional demand, attracted by the profitability of housing compared to other financial products," explained from the Tinsa Research Service.

As for housing supply, it is reactivating "with prudence" and the figures for permits issued during 2021 recover the level recorded in 2019, notes the company, which expects the tensions generated by the high costs of construction materials to be diluted "with the normalisation of supply chains."

Compared to the last quarter of 2019, the price per square metre is 6% higher in the Balearic Islands. With respect to the minimums of 2015, Madrid is already 48.2 % higher than the prices of that year, as is Catalonia, where housing is 33.4 % more expensive than six years ago, or the Balearics, 34.7 % more. The Islands are also the autonomous community that is closest to reaching the 2007 highs again, although it is still 8.2% away from the level reached in that year.