Almost 60% of family income. That is the theoretical effort that a household with an average income has to make to pay an average mortgage in the Balearic Islands. Housing prices continue to stretch our pockets and there are more and more provinces where this indicator exceeds 30%, the maximum threshold recommended by the Housing Law so that the payment for the home falls within “affordable conditions.” The provinces where this limit is exceeded are 20 according to the latest data from the appraiser Tinsa, which shows a rebound in housing prices in the second quarter of 2024.
The average monthly mortgage payment in Spain is 711 euros, which means that the effort rate compared to average income is 34.5%. Above this percentage are the provinces of the Balearic Islands, Málaga, Madrid, Barcelona, Santa Cruz de Tenerife, Cádiz, Navarra, Alicante, Las Palmas, Huelva and Seville. Below, but with at least 30%, are Guadalajara, Girona, Pontevedra, Almería, Cantabria, Córdoba, Salamanca, Zaragoza and Granada. Valencia, in 21st position, has an effort of exactly 30%. Furthermore, the two autonomous cities, Ceuta and Melilla, exceed the maximum recommended effort, the same thing that happens in 13 capitals, where the percentage exceeds 35%. In four of them, 50% is exceeded: Palma, Madrid, Barcelona, and Málaga.
The Balearic Islands appear in the report as the epicentre of the imbalance between what households earn and what houses are worth. The effort rate, always high in a market with a lot of foreign buying pressure, has skyrocketed since 2022, when it stood at 51.7%. It now reaches 59.9%, with amounts that continue to grow. Between April and June, houses have been 8.3% more expensive than in the same period in 2023. And the square metre is paid on average at 2,985 euros, the second most expensive behind Madrid (2,995 euros).
The neighborhoods of Madrid and Barcelona reflect with particular clarity the growing tensions in the market. The district of Salamanca, in the capital, exceeds 6,000 euros per square meter for the first time in the records of Tinsa, the largest Spanish appraiser. In both cities, the recommended effort is 30% everywhere: the Madrid district of Moncloa-Aravaca is the one closest to that percentage, and even so there the average mortgage eats up 31.6% of the salary.
In Spain as a whole, housing has become more expensive by 3.1% year-on-year in the second quarter of 2024. Tinsa highlights, however, that prices seem to be heading towards a certain stabilization, since the quarterly increase (compared to what they were worth houses between January and March of this year) is 0.5%. Some provinces, however, far exceed that percentage. In Cantabria, houses are 3.4% more expensive than at the beginning of the year. And something similar happens in Murcia (2.7%), Málaga (2.5%), Pontevedra (2.3%) and Girona (1.9%). In the records of the appraisal society, no province has yet equaled the maximum values that were reached during the real estate bubble at the beginning of the century, something that has already begun to happen in other indicators.
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