RESIDENTIAL property prices rose again in July outside of Spain's major cities, with homes for sale on the islands now breaking post-recession records.
Leading quantity surveyor association TINSA says the average price tag is now 3% higher than a year ago, and that the most recent full-month figures – for July 2024 – reveal an increase of 0.7% in values compared with those of June.
Whilst property price rises are beginning to stagnate in the country's largest metropolitan areas and in land-locked provinces, those in more traditional tourism zones are seeing an across-the-board increase in value.
This is particularly the case in the Balearic and Canary Islands, where property price hikes between July 2023 and July 2024 have reached 8.6% - nearly three times the rate of inflation.
In these offshore regions, average home prices are now above the historic highs seen in 2007 and early 2008 – a time when property values across the country reached unrealistic heights never witnessed before and which preceded a nationwide housing market crash, provoking a long recession.
There is no suggestion of a recurrence of this grim period in Spain's recent history, however: The typical value of a residential property on the islands is around 1.7% above that of late 2007 which, allowing for inflation over the 17 years since, responds more to a healthy demand than an unsustainable property boom.
Coastal tourism enclaves see above-average price increases
TINSA considers this demand to be location-specific, given the Balearics' and Canaries' status as mature and well-established holiday destinations, and says this same factor is also driving up home prices elsewhere on Spain's Mediterranean seaboard.
All down the east coast, homes have risen in value by an average of 6.2% in the past year, with a typical increase in the last month of around 0.4% on the mainland side of the Mediterranean, compared with 1.1% in the Balearics.
The Balearic Islands have seen an 8.6% rise in property values in the past year. The photo (by Santa Eulària des Rius tourism board) shows the Cala Llenya beach in this popular destination in Ibiza
Slowdown in major cities with high housing demand
A general slowdown has been noted this summer in major cities, particularly Madrid and Barcelona, with year-on-year price rises at 2.1% - below the national average and lower than the rate of inflation.