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Home prices in the Balearics surged by 12 percent in the first quarter of this year reaching levels not seen since the property boom of 2007. The Balearics led the way with the biggest price increases in the country, powering past the national average of a rise of eight percent.

The spectacular growth in prices is driven by demand, according to experts, with investors returning to the marketplace after Covid. Prices of new-build properties rose by 12 pecent, according to official figures.

However, the big rise in prices could be short-lived with economists forecasting a rise in interest rates across Europe, in an effort to cool inflation.

"Higher borrowing costs will hit demand but sales will still remain strong, especially in the Balearics," said one propery expert.