House prices continued to fall in Mallorca during 2012

According to the latest TINSA report on Spanish house prices published at the beginning of January, the Mediterranean Coast and Metropolitan Areas continue to be the areas most affected by falling prices, while the Balearic and Canary Islands were the least affected.

As mentioned in the report, the general price decline in Spain last year was of 11.3 percent compared to 2011. Below this average, in the Balearic Islands the decrease was of 6.6 % compared to 2011.

The decrease in prices follows the trend observed since 2008. Compared to the general peak of 2007, property prices in Spain have declined with an average of 33 percent since the beginning of the economic crisis. In the Balearic Islands and the Canary Islands, however, the percentage is 27 percent. Keeping in mind this average, the development of prices depends however greatly on the type and location of each property.

The builders association in the Balearic Islands is expecting that the number of unsold new homes has fallen to under a thousand. Especially the end of 2012 again more new homes were sold, as buyers wanted to benefit from last year’s tax advantages.