Average house price fell by one per cent in 2023

Palma.—The College of Registrars 2023 yearbook confirms that 2023 was not a great year for the property market. Sales in the Balearics fell by 20%, the consequence of a combination of property prices and the rise in interest rates. This decrease was twice as great as for Spain as a whole - 9.8%.

Both local and foreign purchasers were affected to a similar degree. The foreign market continued to account for roughly one-third of transactions - 31.5% to be precise - but this was three percentage points down on 2022. The main foreign market was Germany, with 38.2% of all foreign purchases, followed by the UK (10%), Italy (5.9%) and France (5.4%).

As to prices, the yearbook points to a 1.1% fall in the average price of a home in the Balearics in 2023. This was in line with the national average. Actual prices were not. The average price paid last year was 342,849 euros; this was the highest in the country. The lowest average price in Spain was 80,898 euros in Extremadura.

Cash purchases

According to the yearbook, the sale of more than 4,500 homes in the Balearics were ‘cash purchases’ in that they were made without mortgages. There were 14,202 sales in all, for which there were 9,508 mortgages.

The rise in interest rates and tighter lending controls by banks - therefore the granting of fewer mortgages - were reasons recently identified by the College of Notaries for a fall in house prices in the Balearics in 2023, which the college put at 0.4%, the first decrease for ten years.

As a result of the 2023 decrease, the notaries placed Madrid above the Balearics as the most expensive region in Spain for housing.