Balearics
Construction Boom Drives Balearic Economy In Early 2025
The Balearic Islands are off to a strong economic start in 2025, powered by a growing construction sector and supported by record-breaking tourism and employment figures. According to the May edition of the Momento Económico report from the Regional Government’s Directorate General for Economy and Statistics, residential development is boomin—particularly in the Pitiusas and Menorca—reinvigorating an already resilient economy.
Residential construction rebounds sharply
The number of residential building permits issued in the Balearics rose by 27.6% year-on-year in the first quarter of 2025, with March alone seeing a 67.9% increase compared to 2024. This level of activity hasn’t been seen since 2021—considered one of the best years for the construction sector in the past decade.
The revival comes as a welcome driver for the region’s economic outlook. Growth has been forecast at 2.7% for the year, outpacing the predicted Spanish average of 2.6% and the European Union’s modest 1.1%. While the regional government remains cautious amid more optimistic predictions by private analysts, momentum appears strong in key sub-sectors of the economy.
Tourism remains a vital engine
The report details a healthy expansion in the all-important services sector, which grew by 3.7% year-on-year in Q1. Tourism continues to be the pillar of this performance. Between January and March, the Balearic Islands welcomed 1.28 million visitors—2.6% more than the same period last year. Average stays remained steady at 6.6 days.
Spending metrics also suggest a higher-value visitor profile:
- Total tourist expenditure: €1.32 billion (+5.7%)
- Average spend per tourist: €1,026 (+3.0%)
- Daily expenditure per tourist: €155 (+7.2%)
With early data indicating robust seasonal bookings for the upcoming quarters, tourism is set to reaffirm its role as a key pillar of Balearic prosperity.
Industrial sector joins the party
Less dominant but increasingly relevant, industry also saw notable expansion during the first quarter, with production levels climbing in tandem with rising demand.
Inflation, however, remains a point of pressure. While headline prices are edging higher across Spain, the Balearics are leading the charge. Core inflation stood at 3.0% in April, well above the national average of 2.4%, further widening the region’s price differential.
Employment reaches historical highs
Possibly the most bullish signal: employment is at an all-time high. Social Security affiliations rose to 574,166 in April—an historic record for that month, representing a 3.4% year-on-year improvement.
Construction and services are the top job creators, though even the agricultural sector, which saw a slight annual drop of 1.1%, posted its third-best April result since 2009.
A strong foundation for the year ahead
The convergence of robust residential development, thriving tourism, expanding industry, and record employment positions the Balearic economy on exceptionally strong footing heading into the second half of 2025. Still, the government’s economic office is urging caution in the face of mounting inflation and broader geopolitical uncertainties.
The Balearic Islands are off to a strong economic start in 2025, powered by a growing construction sector and supported by record-breaking tourism and employment figures. According to the May edition of the Momento Económico report from the Regional Government’s Directorate General for Economy and Statistics, residential development is boomin—particularly in the Pitiusas and Menorca—reinvigorating an already resilient economy.
Residential construction rebounds sharply
The number of residential building permits issued in the Balearics rose by 27.6% year-on-year in the first quarter of 2025, with March alone seeing a 67.9% increase compared to 2024. This level of activity hasn’t been seen since 2021—considered one of the best years for the construction sector in the past decade.
The revival comes as a welcome driver for the region’s economic outlook. Growth has been forecast at 2.7% for the year, outpacing the predicted Spanish average of 2.6% and the European Union’s modest 1.1%. While the regional government remains cautious amid more optimistic predictions by private analysts, momentum appears strong in key sub-sectors of the economy.
Tourism remains a vital engine
The report details a healthy expansion in the all-important services sector, which grew by 3.7% year-on-year in Q1. Tourism continues to be the pillar of this performance. Between January and March, the Balearic Islands welcomed 1.28 million visitors—2.6% more than the same period last year. Average stays remained steady at 6.6 days.
Spending metrics also suggest a higher-value visitor profile:
- Total tourist expenditure: €1.32 billion (+5.7%)
- Average spend per tourist: €1,026 (+3.0%)
- Daily expenditure per tourist: €155 (+7.2%)
With early data indicating robust seasonal bookings for the upcoming quarters, tourism is set to reaffirm its role as a key pillar of Balearic prosperity.
Industrial sector joins the party
Less dominant but increasingly relevant, industry also saw notable expansion during the first quarter, with production levels climbing in tandem with rising demand.
Inflation, however, remains a point of pressure. While headline prices are edging higher across Spain, the Balearics are leading the charge. Core inflation stood at 3.0% in April, well above the national average of 2.4%, further widening the region’s price differential.
Employment reaches historical highs
Possibly the most bullish signal: employment is at an all-time high. Social Security affiliations rose to 574,166 in April—an historic record for that month, representing a 3.4% year-on-year improvement.
Construction and services are the top job creators, though even the agricultural sector, which saw a slight annual drop of 1.1%, posted its third-best April result since 2009.
A strong foundation for the year ahead
The convergence of robust residential development, thriving tourism, expanding industry, and record employment positions the Balearic economy on exceptionally strong footing heading into the second half of 2025. Still, the government’s economic office is urging caution in the face of mounting inflation and broader geopolitical uncertainties.
For the first time ever, the Balearic Islands have become the most expensive region in Spain for second-hand housing, with average asking prices reaching a record-breaking €5,028 per square metre.
The figure, published in Fotocasa’s latest Housing Index, marks a staggering 21% year-on-year increase—outpacing every other autonomous community and placing the islands ahead of perennial frontrunners Madrid and the Basque Country.
Record prices amidst booming demand and limited supply
The price surge means that a standard 80m² property in the Balearics costs roughly €69,500 more than it did this time last year, €402,240 versus €332,740 in May 2023. It’s a historic peak, driven by “unprecedented demand pressure,” according to María Matos, Head of Research at Fotocasa.
The causes? A cocktail of factors: improved mortgage conditions, post-pandemic economic recovery, sustained inward migration, and—most importantly—a chronic mismatch between housing demand and the availability of new supply. Development continues to lag, with tight land-use regulations and slow permitting processes frustrating attempts to ease the pressure.
“The current dynamic is unsustainable without policies that address the imbalance between supply and demand,” warns Matos. “The Balearics are increasingly out of reach for a growing share of local residents.”
The national context: a market running hot
Spain’s property market continues its upward march. Nationally, the average price per square metre rose by €341 over the past 12 months, adding more than €27,000 to the typical price of a home. Price increases were recorded in 94% of provinces and 86% of municipalities studied, with eight autonomous communities seeing double-digit spikes.
Baleares (20.9%) tops the leaderboard, joined by:
- Valencia: +28.3%
- Murcia: +24.1%
- Andalucía: +18.5%
- Madrid: +17.9%
- Canary Islands: +17.9%
- Asturias: +16.6%
- Cantabria: +15.5%
Navarra was the lone outlier, recording a slight drop of -1.4%.
Breaking down the Balearic boom: top-performing towns
It’s not just Palma pushing up the averages. In fact, the most dramatic price increases have occurred in smaller towns and secondary municipalities:
- Campos: +65.8%
- Santa Eulària des Riu: +44.3%
- Maó (Menorca): +37.3%
- Sant Josep de sa Talaia: +21.7%
- Llucmajor: +17.0%
- Andratx: +16.8%
- Manacor: +16.5%
Overall, prices increased in 94% of the 17 municipalities analysed across the archipelago.
A tipping point for affordability
While the data paints a picture of robust market performance, it also raises uncomfortable questions about housing access for residents. Local wages have not kept pace with real estate inflation, and critics warn the surge is accelerating the “Mallorquinisation” of the islands: ever more homes are being bought as second homes or investments, pushing locals further out of the ownership market.
With Balearics now ranked top for residential prices—and no sign that demand is cooling—the challenge for policymakers is acute: how to safeguard affordability without stunting the market or deterring responsible investment.
A new milestone, but at what cost?
Breaking through the €5,000/m² ceiling signals a new phase in the Balearic housing story—one of booming investor confidence, yes, but also deepening anxiety over long-term affordability. With high demand and tight supply showing no signs of reversal, the islands’ housing market looks set to remain both top-tier—and increasingly out of reach—for average residents.
Última Hora Del Conflicto En Oriente Próximo, En Vivo | Al Menos 10 Muertos En Israel En La Segunda Noche De Intercambio De Ataques Con Irán
Inside A Camouflaged Drone Workshop, A Step Away From The Front Lines In Ukraine
The Russian Cannons That Guard The Spanish Coast
-
Lead2 weeks ago
Spain falls to fifth best country in Europe to be LGBTQ+, but where’s first?
-
Uncategorized4 weeks ago‘
-
Uncategorized4 weeks agoParody account given shocking rename after Doohan-Colapinto controversy
-
Uncategorized3 weeks agoF1 Practice Today: Monaco Grand Prix 2025 start times, schedule, TV channel and FREE live stream
-
New Developments2 weeks agoStylish 3-Bedroom Apartment With Panoramic Sea Views – Benalmádena
-
Apagones luz4 weeks ago
España Y Portugal Se Unen En La Presión A Francia Y A Bruselas Para Que Aumenten Las Interconexiones Tras El Gran Apagón
-
Lead4 weeks ago
Spain’s stronghold on British tourism is ‘under threat’ by a Mediterranean rival
-
Uncategorized4 weeks ago2025 championship battle set for huge TWIST as Horner issues Verstappen future update – F1 Recap
