Mallorca Real Estate Market Study 2024: In Mallorca, prices continue to rise.

Mallorca is booming. Visitor numbers are at an all-time high and the property market is also unaffected by the global challenges. In Mallorca, the average price per square metre for a holiday property in January 2024 was around 5,800 euros. This is 1.7 per cent more than in the previous year and shows a high degree of stability, for example, compared to the German property market. The luxury segment remains the price driver with an increase of 13 per cent. Top sea views can even cost up to 18.8 per cent more. The most expensive region continues to be the south-west, closely followed by the increasingly popular Palma city. While prices are rising, the number of properties for sale continues to fall. In the luxury segment, the market is almost empty and experts do not see an end to the price increases.

• Luxury properties will increase in price by 13 per cent in 2023 and become more scarce
• For the first time, the island-wide average price for luxury properties is more than 10,000 euros per square metre
• Supply is decreasing, especially for simple and luxury properties
• Property prices have risen by up to 78 per cent since 2015
• No end to price increases in sight

Mallorca properties remain stable in value: prices have risen by up to 78 per cent since 2015

These are the findings of an independent and representative market study conducted by the Steinbeis Transfer Institute (STI) Centre for Real Estate Studies (CRES) in collaboration with the property company Porta Mallorquina Real Estate. Since the first study in 2015, the average price across the island has risen by 55 per cent and in Palma City by as much as 78 per cent. The inflation rate in the eurozone was 23 per cent in the same period. This discrepancy underlines Mallorca’s continued reputation as an attractive region for property investments and is a clear sign of the region’s sustained value stability and attractiveness as an investment destination.

Study director Prof. Marco Wölfle from the Center for Real Estate Studies (CRES):

“Last year, Mallorca not only maintained its position as one of the most sought-after holiday destinations and property locations in Europe, but also further expanded it. The positive correlation between tourism intensity and property demand remains intact. This fact, coupled with Mallorca’s attractive macro-location – with the beauty of the island, its mild climate and high quality of life – makes the Balearic island a stable and lucrative property market.”

Properties at the edge of the price range particularly in demand: luxury properties are becoming increasingly rare

The fact that Mallorca continues to be a seller’s market is also reflected in the development of supply. Compared to the previous year, 11.5 per cent fewer properties are on offer. Properties at the upper and lower end of the price range appear to be particularly popular with buyers, but luxury properties no longer even account for 4 per cent of the island-wide supply. In 2020, the proportion was still around 17 per cent. The proportion of simple properties has even fallen by around 50 per cent to only around 9 per cent within a year.

Porta Mallorquina franchise partner Timo Weibel:

“The property market in Mallorca can still fulfil practically every wish in terms of location, features and budget. The fact that prices are calming down somewhat after the double-digit increase in 2022 is positive for everyone and speaks against the formation of a bubble. But anyone waiting for prices to fall significantly, as in Germany, will be disappointed. At least there is one piece of good news for prospective buyers. You can take it a little bit more calmly again in your search for your dream property. It is now taking several months to sell again. In previous years, properties were regularly sold or optioned within days or a few weeks as soon as they came on the market, sometimes even without a personal viewing by the buyer. This has normalized, but prospective buyers should not waste time unnecessarily if they have their sights set on a specific property.”

Prices are highest in the south-west and rising fastest in the centre of the island

As in previous years, the regional price level remains very different. Due to the size of the island prospective buyers with wide ranges of ideas can find suitable properties of stable value, fulfilling a lifelong dream or to become an investment. The south-west remains the most expensive at 7,700 euros per square metre although Palma city is increasingly catching up at 7,300 euros per square metre. The most affordable region remains the centre of the island with an average of 4,165 euros per square metre although prices are currently rising particularly sharply there. Within a year, buyers must pay an average of 13.5 per cent more for properties in this region with its lush nature and Mallorcan lifestyle far away from the tourist hustle and bustle.

Luxury remains a price driver and cracks the €10,000 per square metre mark

While supply in the luxury segment is falling, prices are continuing to rise, and this in double figures. Last year, the island-wide average price of a luxury property on Mallorca passed the 10,000 euro per square metre mark for the first time. Compared to the previous year the price rose from 9,650 euros to 10,900 euros. In the south-west, which is well-known and popular for its luxury properties, prices in this segment rose by 4 per cent to 13,400 euros per square metre. As with average prices, other regions are also catching up in the luxury segment. In the area around Palma, luxury properties cost an average of 9,850 euros per square metre, 10.5 per cent more than in the previous year.

Macro situation Mallorca: Record number of holidaymakers in 2023 also drives property market

In addition to the property market, the tourism sector in Mallorca and the Balearic Islands as a whole is unimpressed by the global challenges. For the renowned American business magazine “Forbes”, Mallorca was the top travel destination for 2023. The result: at 14.4 million, more visitors came to the Balearic Islands in 2023 than ever before. Compared to the previous year, the islands recorded an increase in visitors of 9.1 per cent and this positive development of tourism is sending a significant signal for the island’s property market. The positive correlation between the intensity of tourism and demand for property remains intact: A large proportion of visitors have the desire to own their own property in Mallorca, which is sustainably boosting demand and, therefore, prices for holiday properties.

Outlook: New visitor records and rising property prices expected

The environment suggests that property prices on Mallorca will continue to rise. A new visitor record is expected for 2024. The range of flights is to be expanded, and not just from Germany. A new direct connection between Miami and Palma, for example, is expected to attract more well-heeled holidaymakers, and therefore potential property buyers, from the USA to the island. The high demand, however, is being met by a declining supply and newly-built properties cannot close the gap. CRES therefore expects property prices to continue to rise in the low single-digit percentage range in the coming years.

Download Mallorca property market study 2024

Porta Mallorquina Real Estate presents the 10th edition of the annual market study “Holiday Property Market Mallorca”. Since 2015, the Freiburg University Institute Centre for Real Estate Studies (CRES) in collaboration with Porta Mallorquina Real Estate the market for holiday properties in Mallorca.

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