Balearic house prices have risen by 60% in three years

Wages have only increased by 7%

More and more locals residents are being priced out of the property market.

More and more locals residents are being priced out of the property market | Photo: Majorca Daily Bulletin reporter

| Palma |

The price of second-hand housing in the Balearics has increased by 59.1% in three years, while salaries in the region have risen by only 7%, according to a report by Fotocasa and InfoJobs. The study ‘Relationship between salaries and home purchases in 2024’ published on Thursday points out that increases in housing prices and salary improvements in the islands have not gone hand in hand in recent years.

In 2024, the price per square metre rose by 19.5% and salaries offered rose by 6.2% compared to the previous year. Looking at the evolution of salaries and house prices since 2019, salaries have risen by 0.4% while housing has risen by 65.1%.

The director of studies and spokesperson for Fotocasa, María Matos, points out that access to housing ‘has deteriorated significantly’ in recent years due to ‘the sharp disconnect’ between the evolution of house prices and wages. ‘Housing prices are rising three times faster than wages, reflecting a structural problem that directly affects the purchasing power of citizens, especially young people and families with low and middle incomes,’ she explains.

According to Matos, Spain is experiencing a boom in demand for housing, which, given the limited supply, is pushing prices up. ‘This is a very difficult situation to reverse, which means that access to housing will continue to be difficult and social inequalities will be accentuated,’ she concludes.

In terms of salaries, the director of communications and research at InfoJobs, Mónica Pérez, says the evolution of salaries offered on the platform has shown an upward trend. However, in both 2022 and 2023, the increase ‘is not enough’ to offset the effect of inflation.

‘In 2024, we are seeing a change in trend with inflation under control and some recovery in purchasing power in general, although the situation in the property market continues to make access to housing difficult for a large part of the population,’ says Pérez.

The average salary registered on InfoJobs in 2024 in the Balearics was 27,327 euros per year, representing a decrease of 0.7% compared to 2023. Compared to 2021, salaries rose by 13.9%. Meanwhile, the average price of housing in the region in 2024 was €4,597 per square metre, an increase of 19.5% compared to the previous year and 59.1% in three years.

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