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.
