Balearic Islands Face Severe Housing Affordability Crisis Despite Economic Growth
The Balearic Islands’ booming economy contrasts sharply with a deepening housing affordability crisis, as residents need over 60 years to buy a home—double the national average.
- • Balearic residents require 60.8 years to afford a home, nearly twice Spain’s average.
- • The Balearic economy is growing with projected record employment in 2024.
- • Tourism in the region is robust with record stays and increased spending.
- • Spain faces high youth unemployment and poverty rates impacting affordability.
- • Loss of purchasing power since 2020 worsens economic challenges for citizens.
Key details
The Balearic Islands are experiencing a severe housing affordability crisis amid strong economic growth and booming tourism. According to a recent Council of Economic and Social (CES) report, residents in the Balearic Islands need an average of 60.8 years to afford to buy a home, nearly double the national Spanish average of 29.7 years. This calculation assumes families allocate 30% of their income to housing costs, underscoring the inaccessibility of homeownership in the region despite overall economic progress.
The Balearic economy continues to thrive, with GDP growth and record employment levels projected for 2024. Tourism is also robust, with record numbers of stays and increased spending per visitor noted for the year. Francesc Fiol, president of the CES, highlighted that while the service sector and the broader economy demonstrate dynamism, challenges including population growth, exorbitant housing prices, and environmental concerns remain critical. The CES report was presented to key regional officials such as Marga Prohens, president of the Balearic Government, and Gabriel Le Senne, president of the Parliament.
This housing crisis exists against a backdrop of wider Spanish economic difficulties: economist Santiago Niño Becerra pointed out Spain’s high youth unemployment rate of 25.3% and a general poverty rate near 26%, which are substantially worse than France’s figures. Additionally, Spain's productivity has stagnated at levels seen in France in 1996. Despite economic growth, Spaniards have suffered a nearly 20% loss in purchasing power since early 2020, one of the highest declines in Europe, which worsens affordability issues.
Together, these findings reveal a paradox where the Balearic Islands are growing economically while residents face escalating barriers to homeownership, exacerbated by persistent social and economic inequalities. The report underscores housing affordability as a critical area needing urgent policy attention to ensure sustainable development and quality of life improvements in the region.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.