The rise in housing prices in the Balearic Islands is pushing an increasing number of its citizens to buy apartments in other autonomous communities. It is a growing phenomenon. In the first quarter of this year, one in four property purchases made by residents of the islands was in another autonomous community, with Asturias as the preferred territory. The previous year, these external purchases accounted for 21% of total transactions, according to data from the Ministry of Housing.
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Between January and March, residents of the Balearic Islands acquired 716 homes, 24% of total purchases, in other territories. This is the second highest figure, only surpassed by Madrid, with 32% of purchases outside its territory, although in the capital its peculiar idiosyncrasy explains purchases in neighboring provinces for work reasons, something that does not occur in the Balearic Islands.
This real estate exile is an anomaly in the rest of the autonomous communities. Only the Basque Country and Navarre come close, but at a distance, with 18% and 15% of purchases made outside their territory. In the rest of the communities, the percentage is below 10%. Andalusia, for example, barely records 3% of purchases by its residents outside the community. The phenomenon, therefore, cannot be interpreted solely as a general trend of mobility among Spanish buyers. In the Balearic Islands, there is a specific factor, which is the huge difference between the price of island housing and that of much of the territories to which demand is directed.
The community is already for island residents what Mallorca is for Germans
The result is that the Balearic Islands export buyers to cheaper territories while receiving buyers mainly from markets with high purchasing power that unbalance the market and cause prices to rise. The consequence is a market in which residents find it increasingly difficult to compete for housing in their own territory and have no choice but to seek housing solutions elsewhere.
The president of the College of Real Estate Agents of the Balearic Islands (Coapi), José Miguel Artieda, warns that this trend is increasing and will continue as long as the price escalation, which for now has no brake, persists. The president of the property agents believes that the high cost of living on the islands, “starting with housing,” forces certain buyers to expand their search radius. Among them are people who, especially upon retirement, choose to move their residence to territories where the cost of housing and living is lower. In addition, there are citizens with economic capacity who find prices in the Balearic Islands that hinder certain transactions. “Many people invest outside because prices here are sky-high and they cannot do it,” he explains.
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In its real estate statistics for June, the College of Notaries places the Balearic Islands as the community with the most expensive price in all of Spain. The square meter is priced at 4,384 euros, above the 3,864 euros of the Madrid community and the 3,083 of the Basque Country. Catalonia and the Canary Islands share fourth place, with the price per square meter at 2,516 euros.
Balearic Islands have the most expensive square meter in Spain, at 4,384 euros, compared to 1,409 in Asturias
Artieda warns that the economic capacity of resident buyers has reached its limit. Until June of this year, home sales had fallen by 20% while prices increased by 16% compared to the same month of the previous year, according to notarial statistics. In this exodus of purchases from the Balearic Islands to other territories, Asturias has become for island residents what Mallorca is for Germans. It accounts for 15% of total purchases made in another province during the first quarter of the year, a trend that has increased since the end of the pandemic.
“Word of mouth” has helped make it an increasingly well-known alternative, according to the president of the real estate agents. The Asturian appeal combines considerably lower prices with milder temperatures and good connections with the islands. However, pressure on the real estate market is already beginning to be felt in this community and Artieda highlights that there are already clear signs of an upward trend in prices, but for now, in Asturias, the average housing price is 1,409 euros per m2, according to the College of Notaries. An average 90 m2 home would cost 126,810 euros there; in the Balearic Islands, 394,560.
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