House prices in Palma de Mallorca back to boom-time peak, but rest of Spain still a long way off

Palma de Mallorca property market

Palma de Mallorca

For the second month in a row, average property prices in the capital of the Balearic Islands were higher than those before the crisis.

In October, prices in Palma de Mallorca reached €2,578 per square metre, 3.4% higher than at the end of 2010, according to a report by the property portal Idealista, based on asking prices in the portal’s database.

Most places in Spain are still in negative territory, but with big regional differences. Barcelona prices at 8.4% below their peak, Madrid at -20.4%, San Sebastián at -21.5% and Malaga at -25.6% are all examples where prices have recovered the most. However, other provincial capitals such as Lleida, Zaragoza and Castellón are still over 50% down.

Out of a total 52 provincial capitals, Palma de Mallorca is the only one to return to prices not seen since the property bubble burst. In both September and October, prices rose higher than the record registered in Q4 €2010 to reach €2,578 per square metre, 3.4% higher than their peak in 2010. The rest of Spain’s provincial capitals remain below their boom-time peaks.

In Barcelona, for example, prices remained unchanged in October (€4,333 per square metre), 8.4% below their peak registered in Q1 2007 (€4,732 per square metre). Barcelona continues to be the most expensive city in Spain.

After Palma and Barcelona, in terms of peak-to-present house prices, come a small group of cities including Madrid, San Sebastián, Málaga, Ourense, Las Palmas de Gran Canaria, A Coruña, Bilbao and Lugo that all have prices between 20 and 30% below their peaks. Madrid has property prices some 20.4% below their peak in Q2 2007. Prices then were €4,035 per square metre compared to their current €3,212.

The other 40 provincial capitals register prices still over 30% below their boom-time highs of Q4 2007 and Q1 2008.

The capitals that have suffered the effects of the crisis most and seen property prices lose more than half their value are Lleida (-59%), Zaragoza (-56.5%), Castellón (-56.1%), Huesca (-55.5%), Ávila (-54.7%), Almería (-52.5%), Segovia and Guadalajara (both with -52%), Cuenca (-51%) and Soria (-50.4%).

About SPI News Feed

SPI News Feed provides general news about the Spanish property market and related articles translated from the Spanish press. For more in depth news, analysis, and opinion, see Mark Stücklin's blog.

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