Periodic reports on the Mallorca property market (Balearic Islands)
This page offers data-driven reports on Mallorca’s property market, consolidating key data from public sources to highlight the latest trends and developments. Illustrated with charts and infographics, these reports provide critical insights into the residential real estate market of Mallorca (Majorca in English), with a focus on flagship municipalities such as Andratx, Calviá, Palma, Santanyí, and Pollensa (Pollença in Catalan). These reports are written for foreign investors, property buyers, vendors, professionals, and journalists looking for insight into Majorca’s property market to help inform big decisions with important financial consequences.
Mallorca property market overview
Mallorca is a prime destination for international property buyers looking for second homes, holiday properties, or investment opportunities. Renowned for its stunning coastline, Mediterranean lifestyle, and vibrant cultural scene, the island attracts a significant share of Spain’s foreign property transactions. As one of the most dynamic housing markets in the Balearic Islands, a focused report on the Mallorca property market is invaluable for anyone with an interest in this region.
Located in the Balearic Islands, Mallorca offers a diverse range of housing options, from luxurious villas to charming apartments in historic towns. The market presents unique opportunities and challenges worth analysing. Key municipalities like Andratx, Calviá, Palma, Santanyí, and Pollensa (Pollença) are among the most sought-after areas for buyers and investors.
The reports cover a wide range of topics to provide a comprehensive understanding of the market, including:
- Home sales across the Balearic Islands and Mallorca
- Foreign buyers: market share, residency status, and second-home investments.
- New-build properties: sales, pricing trends, and index data.
- House prices: general trends and specific insights into flagship municipalities like Palma and Andratx.
- Mortgage lending: base rates, borrowing costs, and their influence on the market.
- Housing starts and key factors affecting supply and demand.
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2024 Full Year
The Mallorca housing market in 2024
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2024 H1
Mallorca housing market report: First half of 2024 (H1 2024)
Sales trends
Bearing in mind that Mallorca represents 80% of the Balearic housing market, in H1 2024, the region recorded 7,588 home sales, representing a year-on-year (YoY) decline of 3% (Fig. 1-1). This figure was also 3% below the ten-year average, but over the past decade, sales have risen by 27%. Of these transactions, 2,877 involved foreign buyers, a marginal YoY decrease of 1%. Compared to the ten-year average, sales to foreigners dropped by 2%, but a decade-long perspective shows an increase of 16%.
Breaking this down further, 1,009 purchases were made by foreign residents (expats), while 1,868 were by foreign non-residents (FNR) investing in second homes or holiday properties (Fig. 1-2). Expats registered a YoY decline of 1%, while FNR activity fell by less than 1%. Over the past ten years, expat transactions decreased by 1%, but FNR purchases surged by 28%.
Foreign buyers accounted for 38% of all property transactions in the region, a slight increase from 37% a year earlier. This share remains below the decade-high of 42% (Fig. 1-3).
Sales of new-build properties stood at 631, a YoY decrease of 21% (Fig. 1-4). Compared to the ten-year average, this represented a drop of 8%, though the decade-long growth was 10%.
Looking just at Mallorca, there were 4,952 sales across the island during the period, a YoY decline of 14%, and 7% below the ten-year average (Fig. 1-5).
Price trends
The average price of homes sold in the Balearic Islands during H1 2024 was €411,454 (Fig. 2-1), reflecting a YoY increase of 10%. Newly built homes commanded significantly higher prices, averaging €747,763, a YoY rise of 43%.
A ten-year price index shows overall property prices in the region rising from 100 to 194, while prices for new builds soared to 302 (Fig. 2-2). This divergence highlights the growing premium for newly constructed properties, driven by limited supply and heightened demand for modern, energy-efficient homes.
In Palma, the average asking price for properties was €3,989/m², a YoY increase of 11% (Fig. 2-3).
Over the past decade, asking prices rose at varying rates across key municipalities, with the index reaching 212 in Palma, 248 in Calviá, and 177 in Pollensa (Fig. 2-4).
Mortgage market
In H1 2024, 3,339 new mortgages were signed in the Balearics (Fig. 3-1), a YoY decrease of less than 1%. This was 2% below the ten-year average, though mortgage activity has increased by 45% over the past decade.
The average Euribor rate during the period was 3.67% (Fig. 3-2). This marks a slight decrease from the 2023 high of 3.69%, but it remains significantly above the record low of -0.49% in 2021. The elevated rate reflects the European Central Bank’s (ECB) tightening monetary policy in response to persistent inflation. Markets anticipate that rates may stabilise but are unlikely to decline significantly in the short term.
Housing starts
Mallorca registered 1,116 housing starts in H1 2024, a YoY decline of 1% (Fig. 4-1). While this figure is 2% above the ten-year average, it represents substantial growth of 68% over the past decade. However, the declining number of new starts signals insufficient housing supply in a region experiencing one of Spain’s fastest population growth rates, placing upward pressure on prices.
Summary
- Home sales: Declined by 3% YoY, with foreign buyers representing 38% of transactions.
- New builds: Sales fell 21% YoY, while prices surged by 43%.
- Prices: Average prices for all properties rose 10%, with new-builds outpacing older properties significantly.
- Mortgages: Slight YoY decline in new mortgages as borrowing costs remain high due to elevated Euribor rates.
- Housing starts: Declined by 1%, exacerbating supply pressures in a growing market.
Conclusion
The Mallorca housing market continues to demonstrate strong demand, particularly among foreign buyers, despite a decline in overall transactions. Rising property prices and a growing premium for new builds reflect supply constraints, especially as housing starts fail to meet demand. High mortgage rates are tempering activity but have not deterred buyers willing to pay a premium for quality homes.
Looking forward, the market is likely to see continued price increases driven by limited supply and strong demand from both domestic and international buyers. However, prolonged high interest rates could moderate activity in the mid-term unless supply constraints are addressed through increased housing starts.
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Disclaimer
These reports are prepared in good faith using publicly available data. While efforts are made to ensure accuracy, no guarantees are provided regarding the completeness, reliability, or suitability of the information for any purpose. Use of this information is at your own risk.
