New figures from fotocasa.es Real Estate Index show that the average price of property in the Balearics has fallen by 1.3% during the first quarter of 2011. This fall equates to the average price of a home now costing €2,304 per square metre. Prices throughout Spain have been on a downward spiral since April 2007.
House prices in Manacor fell by 5.2%, making the averge price of property here €1,516 per square meter. Calvia experienced a fall of 0.4%, but it remains the most expensive place to buy property on Mallorca with an average value of €2932 per aquare metre.
The Bank of Spain expects house prices to fall by a further 5-10% this year, as the adjustment of prices in Spain has not been so severe as in some other countries (for example - Ireland, UK & USA). There remains a problem with over supply, but this is now easing; however the housing market remains uncertain due to the likely rise in interest rates by the European Central Bank later this year.
The full report (prepared by the IESE business school) is available online at Fotocasa.es