The Balearics, Andalusia, Catalonia, the Basque Country and the Canary Islands account for the 25 municipalities with the highest prices for purchasing a home, according to the ranking compiled by Pisos.com, which shows that the Balearics account for more than half of the ranking, with 15 of the most expensive locations nationwide.
Of these, a total of 14 municipalities have increased house prices by more than 50% in the last four years, these being the municipalities of Santa Maria del Camí (80.69%), Andratx (79.49%), Marbella (78.05%), Santa Eulària des Riu (69.65%), Sóller (66.91%), Adeje (66.54%), Bunyola (65.76%), Sant Lluís (63.52%), Sant Antoni de Portmany (62.92%), Benahavís (61.50%), Alcudia (61.26%), Begur (56.14%), Santanyí (56.12%) and Calvia (55.86%).
In contrast, among the most expensive municipalities, only Formentera, Sant Cugat del Vallès and Zarautz have experienced variations of less than 20%. The director of Studies at pisos.com, Ferran Font, has stated that the lack of supply and the shortage of new construction make it difficult to correct this trend in the short term, especially where demand remains high and available land is limited, as is the case in the Balearics.
Furthermore, Font added that while tourist municipalities in the Balearic Islands, Costa del Sol and Canary Islands are ‘skyrocketing’, a high-end residential market such as Sant Cugat del Vallès is showing more moderate growth, with an increase of 10.38%, when in 2021 it was more expensive than Andratx, Pollensa or Sitges.
Key trends
Booming prices: Overall Balearic property values have increased significantly, with some reports indicating an 80% rise over the past decade.
Luxury market growth: Mallorca accounts for a significant portion of Spain's luxury property market, making it a top choice for luxury buyers.
Foreign buyer slowdown: High prices are turning away foreign investors, with sales to foreigners falling since 2023 and a new 100% sales tax on home purchases by non-resident Britons and Americans being implemented.
Rental market pressure: There is intense competition for rentals in certain areas, such as Palma, where 62 people are reportedly battling for every rental property.
Market outlook
While the market shows high prices and strong demand in certain luxury segments, there are emerging concerns about affordability and a potential slowdown due to foreign buyer disinterest.
The high cost of living is a significant factor, and it remains to be seen how the market will evolve with these competing forces at play.