Buying a home in Ibiza, and in general throughout the Balearic Islands, is today an almost unattainable challenge. Prices have reached record highs, driven by high national and international demand, rising construction costs and the scarcity of new construction supply.
According to the latest report from the Valuation Society, the Balearic Islands is the autonomous community with the highest year-on-year growth in the price of new housing in Spain, with an increase of 6.8% in 2024, exceeding the national average growth of 5.5%.
The municipalities where housing prices have reached their highest level ever
The study reveals that six municipalities in the Balearic Islands have reached their historical maximum in December 2024. In absolute terms, Ibiza leads the list with 3,283 €/m², followed by Palma (2,802 €/m²), Calvià (2,517 €/m²), Alcúdia (2,393 €/m²), Sant Antoni de Portmany (2,231 €/m²) and Manacor (1,748 €/m²).
Palma also stands out as the second provincial capital where the price of new housing has grown the most in Spain, with an increase of 6.9% in the last year, only surpassed by Malaga (7.5%).
This scenario has led to the Balearic Islands’ Affordability Index being the lowest in Spain, standing at 31 points, well below the national average of 82 points. It should be noted that the indicator measures the balance between housing prices and the debt capacity of citizens, reflecting that the Balearic real estate market is beyond the reach of most residents.
Real estate sector continues to rise despite affordability crisis
Despite these difficulties, the study reflects an increase in the Real Estate Confidence Index, which rose 1.2 points in the last quarter to 53.2 points in the Balearic Islands.
This optimism is linked to the lowering of interest rates by the ECB, which has facilitated access to credit. However, the combination of high prices, low wages and supply shortages continues to lock thousands of residents out of the market.
The most alarming fact: how many years of salary it takes to buy a home
The report also highlights an unprecedented fact: The Balearic Islands is the community where it takes the longest time to pay for a new home, with a Real Estate Effort Index of 20.1 years.
This indicator measures the number of years of full salary that an average citizen would need to spend to buy an average home, and the figure has increased again compared to last year, when it stood at 18.8 years.
The national average is 7.5 years, which means that Balearic residents need almost three times as long as in the rest of Spain to be able to buy a house.
In other words, a 30 year old who wanted to buy a house in Ibiza or any other part of the archipelago would have to save his entire salary until he was 50 to be able to pay for it.
