Foreign demand for coastal properties is driving prices up. | Majorca Daily Bulletin reporter

The Balearics has the most expensive holiday homes in Spain, with an average price of 2,466 €/m² in the first quarter of the year, according to the report “Housing on the Coast 2022” published today by Tinsa.

The average value of general housing, new and used, in coastal municipalities of the Balearics is 2,466 €/m², which represents a year-on-year increase of 8.6%, and Tinsa warns that “prices and spiking because of high demand and the revival of the construction sector, although the latter remains limited”.

Among the coastal municipalities with the highest prices are Sant Josep (3,700 €/m²), Santa Eulària (3,625 €/m²), Vila (3,398 €/m²), all in Ibiza, Calvià (3,346 €/m²); and Sant Antoni (3,066 €/m²); all above 3,000.

According to Tinsa, the average price of second homes in the Balearics is €6,000/m².
The Balearics has limited development activity, according to Tinsa. In 2021, sales have increased and prices have reached higher levels than in 2019.

The volume of new building approvals has contracted compared to pre-pandemic activity, with 3,057 in 2021, of which 2,513 were in coastal municipalities.

But demand for coastal properties remain high.
If 17,680 homes were sold in the Balearics as a whole in 2021, 15,817 were on the coast.
The majority of buyers are foreigners from Germany, the UK and countries in northern and central Europe. National demand is in the minority and mainly comes from Madrid, Barcelona and the Basque Country.

In Spain as a whole, the coastal market has recovered after the 2020 pandemic slowdown.
51% of the coastal areas have recovered the levels of activity of 2019. 86% of the 280 coastal municipalities analysed recorded annual increases in the price of first and second homes in the first quarter.

Ibiza is the only region where prices are rocketed, with average prices for new and used housing higher than those during the real estate boom of the first decade of the 2000s.

This is the case of the city of Ibiza, with an average price in the first quarter of 2022 which, according to Tinsa valuations, is 20% higher than the maximum of 2008; Santa Eulalia (+18%), Sant Josep de sa Talia (+16%) and Sant Antoni de Portmany (+9%). Capdepera and Soller, in Mallorca, are also above the 2007/2008 peak: 6 % and 1 %, respectively.