Expectations of further price drops impedes purchasers

The sale of resale properties in the Balearics has fallen by 65% since last year. In 2008 around 25 new properties were sold every day whereas the figure today is closer to eight. Reacting to the new figures the Society of Taxations has warns that purchase prices are also falling, showing a 6.6% decline in less than a year. “There has never been such a situation,” said a spokesman.

With real estate constituting most families’ largest investment there is fear that increasing levels of unemployment will bring a wave of evictions and repossessions as people become unable to pay monthly mortgage bills.

The sale of newly built properties, however, has been resilient, showing only a 22% drop – which is identical to the national average.