Making a down payment on an apartment: the barrier that pushes away the dream of homeownership
Ibavi has already guaranteed 672 transactions so that young people can have a mortgage that covers 100% of the price of the home.
PalmTo afford a down payment on an apartment in the Balearic Islands, a young person would need to save their entire salary for seven years. This is the result of applying housing prices in the Islands to the average youth salary calculated by the Youth Council's Emancipation Observatory, which barely exceeds the minimum interprofessional wage of around €16,500 per year. Given this situation, having the minimum €60,000 needed for the down payment and closing costs of buying a property is practically an unattainable dream and becomes an insurmountable obstacle. "Right now, with the salaries in the Islands, it's impossible for a large part of the population, young or old, to have any savings capacity. So, if you can't save a portion of your income, no matter how many years go by, you won't be able to cover the expenses involved in buying a home, and you'll be completely out of the running," he explains. "We have two problems that, combined, are terrifying: a very high price per square meter and very low wages. Added together, these two factors create a barrier that very few families can overcome," he concludes.
Real estate appraiser and market specialist Miquel Àngel Busquets explains that the price surge experienced in the Balearic Islands is an "unprecedented event, unthinkable just a few years ago." This appraiser prepares weekly reports that financial institutions use to decide whether or not to grant a mortgage. "One of the criteria we use is the price of transactions carried out in the same area as an apartment. And you realize that the increase is constant," he says. "You see exorbitant transactions, like a 35-square-meter third-floor walk-up apartment in Rafal for 200,000 euros. A price five or six times higher than what a similar property cost just a few years ago," he states.
As if that weren't enough, the cost of living and the housing shortage also end up driving up the cost of development and construction, according to experts. "Landowners know there's demand, and they don't give anything away. And developers and builders have to cope with very high labor and material costs. The end result is that only luxury or high-end developments are built, and that also contributes to the lack of supply for middle-income earners, who make up the majority."
More population and fewer apartments
Furthermore, with the population increase, the lack of supply has become even more pronounced, according to Xisco Oliver's analysis. "Between 2001 and 2021, the number of inhabitants in the Canary Islands grew more than twice as fast as the number of available homes." Moreover, those who manage to buy a property face the most expensive mortgages in the entire country, according to data from the College of Property Registrars.
According to Oliver, even if a young person manages to obtain a mortgage, "which isn't easy, because the required guarantees are much higher after the bursting of the housing bubble," there is 20% of the price that cannot be financed. Therefore, "we are faced with the need to have between 60,000 and 90,000 euros available for an average apartment. Who can afford this?" he asks.
Faced with this reality, the previous administration of Francina Armengol created the young person's mortgage program, which the current IBAVI management team has maintained. It consists of guaranteeing 20% of the mortgage amount, thus allowing banks to finance the entire loan. This measure, according to sources at the Balearic Government's Housing Department, "is key to enabling banks to finance the entire mortgage, since without a guarantee, many young people would not be able to access the loan."
According to the latest data published at the end of December 2025, the program has approved a total of 672 transactions, a 34% increase compared to ten months prior, when the new conditions were first implemented. At that time, the total number of approved guarantees was 499, and from March 2023 to the end of March 2025, an additional 173 transactions were added.
A large proportion of the transactions are in Mallorca (557), followed by Menorca (89) and Ibiza and Formentera (26), a situation that reflects the concentration of demand on the main island, but also the gradual growth in the rest of the Balearic Islands.
According to UIB geographer Sònia Vives, a housing specialist, measures such as the young person's mortgage are essential, but completely insufficient. "Right now, the situation is completely aberrant. A society is being built where owning a home is a true luxury within reach of very few. Before, the message was to prepare yourself thoroughly, have a job, and be able to secure a home and a future. Now, having a job is by no means a guarantee of anything. Young people, and not so young people, are desperate," she laments.
