The price of housing for rent in the Balearics has experienced unparalleled growth in recent times. In the first quarter of the year the increase was 15.9%.
This situation has led prices to stand at 11.8 euros / m2. Overall, the year-on-year growth rate was 18.6%. In addition, the price increased by 11.7% in Palma to stand at 11.7 euros / m2. It’s precisely in Palma where the owners have increased by 11.4% the price of their rental properties. The price of long time rental housing rose last year by around 10% in the most expensive properties and over 4% in those with the lowest monthly rates. It is almost impossible to find already in some areas of Palma leased flats throughout the year. The most complicated, Santa Catalina, Borne, Palma Old Town and Molinar.
The origin of the situation is in an enormous growing demand formed by two distinct groups. On the one hand, all those people who have been forced to go to the rental market because they can’t afford a purchase. Many could afford a mortgage payment but do not have the necessary savings to pay the entrance (about 30% of the value of the apartment).
And on the other hand, that large number of people who voluntarily choose to live for rent even though they can opt for other options, aware of the sacrifices and risks involved in signing a mortgage in the long term. The current situation is unprecedented in Mallorca, and it also puts its average prices well above what the islanders’ pocket can assume. According to the information provided by this group, in the month of April it is almost impossible to find in Mallorca a flat that is rented for less than 600 euros per month, in the case of Palma and the main tourist areas, the offers that are currently below 1,000 euros per month are at minimum levels.
Mallorca was the autonomous community in which more immediate rents were made in the month of February. That is, leases in which the advertisement was less than two days active. To all this must be added the fact that the center of Palma is being taken literally by Swedish citizens, who are making millionaire investments acquiring entire buildings to be used later to holiday rental.
According to the predicted data, it seems that the situation will remain this way at least 3 years due, especially, to the tourist success. In addition, the National Institute of Statistics (INE) predicts that the Balearic population will continue to increase by an average of 2,400 people per year during the next 10 years.