Authored by the expert who managed and guided the team behind the Spain Property Pack
Yes, the analysis of the Balearic Islands' property market is included in our pack
What do the latest numbers reveal about the Balearic Islands’ real estate market? Are property prices on the rise, or are they stabilizing? Which areas offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in the Balearic Islands, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
1) New construction projects in the Balearic Islands grew by 10% in 2024
In 2024, new construction projects in the Balearic Islands rose by 10%.
This uptick is closely tied to the region's economic performance, which saw a 3.2% growth in the third quarter compared to the previous year. Such economic vitality has a ripple effect, energizing sectors like construction.
Housing projects, in particular, have been a driving force, with a 35% increase in the first half of 2024. This surge reflects a robust demand and a recovering housing market, which in turn stimulates more building activities.
As the economy flourishes, the construction sector remains vibrant, meeting the needs of a growing population and a thriving tourism industry. The demand for new homes and infrastructure is evident, with luxury developments becoming more common in areas like Mallorca.
Investors and developers are seizing opportunities, capitalizing on the region's appeal and economic momentum. The Balearic Islands are not just a tourist hotspot but also a promising area for real estate investment, with new projects continually emerging.
With the ongoing economic growth and increased housing demand, the construction landscape in the Balearic Islands is set for continued expansion. These trends highlight the region's potential for future development and investment.
Sources: Caib.es, Majorca Daily Bulletin, 3cat.cat
2) A one-bedroom apartment in Palma costs an average of €200,000 in 2025
In 2025, the average cost of a one-bedroom apartment in Palma is €200,000.
This price reflects the ongoing trend of high property values in the Balearic Islands, especially in Mallorca. Over the years, property prices have consistently remained elevated in this region, driven by its appeal to both local and international buyers. The demand for real estate here is strong, which keeps prices up.
Take the Ever Marivent apartments in Palma, for example. These are high-quality sea-view apartments currently under construction for 2025. With sizes starting at 208 square meters, they highlight how new developments in Palma are generally on the pricier side. This trend suggests that even smaller, one-bedroom apartments could be quite costly.
The Balearic Islands, including Palma, are known for their attractive real estate market. This allure is largely due to the region's beautiful landscapes and vibrant culture, which draw in buyers from around the world. As a result, the demand for properties remains robust, supporting the high average prices.
In this context, a €200,000 average for a one-bedroom apartment in Palma seems reasonable. The combination of limited space, high demand, and the area's desirability all contribute to maintaining these elevated prices. New developments and ongoing interest from buyers further reinforce this trend.
While specific data for 2025 isn't directly available, the historical patterns and current developments provide a clear picture. The consistent appeal of Palma's real estate market ensures that property prices remain high, making the €200,000 figure plausible.
Sources: Trivago, EV Mallorca
We have made this infographic to give you a quick and clear snapshot of the property market in Spain. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) A penthouse in Mallorca averages €800,000 in 2025
In 2025, the average cost of a penthouse in Mallorca is €800,000.
Over the past few years, international buyers have flocked to Mallorca, drawn by its stunning landscapes and pleasant climate. This surge in interest, especially in 2023 and 2024, has naturally driven up the demand for luxury properties.
However, the island's charm comes with a catch: limited space for new developments. Being an island, Mallorca has finite land, and strict local regulations often restrict the construction of new luxury properties, making penthouses a rare find.
Economic factors also play a significant role. Over the last couple of years, inflation and fluctuating interest rates have impacted buyers' purchasing power and the cost of financing property purchases, further influencing market prices.
These elements combined mean that the real estate market in Mallorca is shaped by both high demand and limited supply, creating a competitive environment for potential buyers.
For those considering a purchase, understanding these dynamics is crucial, as they directly affect the pricing and availability of luxury properties on the island.
Sources: Balearic Properties, Predators Real Estate, Lullius Real Estate
4) In 2025, the average down payment for properties in the Balearic Islands is 20%
In 2025, the average down payment for properties in the Balearic Islands is 20%.
Back in 2023 and 2024, banks in the Balearic Islands typically offered loans covering up to 80% of a property's value. This meant buyers had to come up with the remaining 20% themselves, plus any extra costs tied to the mortgage. This setup was pretty standard, shaping how people approached buying property in the region.
There was a government subsidy that allowed some lucky citizens to secure up to 100% of the mortgage, with the government stepping in to guarantee 20%. However, this wasn't a blanket offer for everyone. Most buyers still found themselves needing to provide that 20% down payment, keeping the traditional approach alive.
For those considering a purchase, understanding this financial landscape is crucial. The 20% down payment is a key part of the buying process, reflecting the typical mortgage financing structure in the Balearic Islands. This means planning ahead and ensuring you have the necessary funds ready when you're ready to buy.
While the government subsidy was a helpful option for some, it didn't change the overall picture for most buyers. The standard practice of needing a 20% down payment remained the norm, shaping the real estate market in the region.
Source: One Mallorca
5) By 2025, property prices in the Balearic Islands are expected to increase by at least 3%
In 2025, property prices in the Balearic Islands are set to rise by at least 3%.
This increase is driven by a few key factors, starting with the steady climb in property sales and rental prices. Back in 2024, property sales were projected to jump by 12.1%, while rental prices were expected to rise by 10.3%. These trends highlight a robust market that continues to attract buyers and renters alike.
Another significant factor is the 19.08% year-on-year increase in second-hand property prices observed in 2024. This surge was mainly due to a mismatch between supply and demand, coupled with favorable financing conditions. Such dynamics have paved the way for ongoing price hikes, though at a more measured pace.
The European Central Bank's approach to interest rates also plays a pivotal role. Their hesitance to signal a major cut in rates means that Spain's mortgage market remains a key player in shaping property prices. This economic backdrop supports the forecast of rising property values in the Balearic Islands.
In this context, the Balearic Islands continue to be a sought-after destination for property investment. The combination of limited supply and strong demand keeps the market competitive, ensuring that prices remain on an upward trajectory.
For potential buyers, understanding these trends is crucial. The ongoing economic conditions and market dynamics suggest that investing in property here could be a wise decision, given the expected price increases.
Sources: Private Property Mallorca, Yes Mallorca Property
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6) Rental yields for homes in the Balearic Islands stayed high at 5-8% in 2024
In 2024, rental yields for residential properties in the Balearic Islands stayed strong, hovering between 5-8%.
Different cities on the islands showed varied rentability, with Manacor boasting a 6.5% yield, which is notably higher than Palma de Mallorca's 4.6%. This variation highlights the potential for investors to find lucrative opportunities depending on the location.
Nationally, Spain's average rental yield was around 6.1% in 2024. Despite the Balearic Islands having a slightly lower average, certain areas still managed to achieve higher yields, keeping the overall range attractive for investors.
The real estate market in Mallorca experienced significant price growth, with the average price per square meter rising by 11% in the first eight months of 2024. This surge was fueled by increased demand from foreign buyers and a limited supply of properties, which in turn supported higher rental yields in select areas.
Foreign interest in the Balearic Islands' real estate market has been a driving force, as international buyers seek properties in this desirable location. This demand, coupled with limited availability, has contributed to maintaining robust rental yields.
Investors looking at the Balearic Islands can find promising opportunities, especially in areas where demand and limited supply push rental yields to the higher end of the spectrum.
Sources: Europa Press, Economia de Mallorca, Yes Mallorca Property
7) Construction costs for residential properties in the Balearic Islands ranged from €3,000 to €4,000 per square meter in 2024
In 2024, the cost of constructing residential properties in the Balearic Islands ranged from €3,000 to €4,000 per square meter.
Property prices in the Balearic Islands were notably high, especially in places like Mallorca. For example, a two-bedroom apartment in Palma de Mallorca cost around €233,000, while a three-bedroom house was about €451,000. These figures highlight the expensive nature of the real estate market, which likely pushed construction costs higher.
In 2024, there was a noticeable trend towards building chalets instead of blocks of flats. This shift in preference could have influenced costs, as chalets often require different materials and labor, potentially raising the cost per square meter.
The regulatory environment in the Balearic Islands was quite complex, with numerous laws and regulations impacting construction. These legal requirements likely added to the overall building costs, affecting the price range per square meter.
Sources: Property Guides, Home4You, Cadena SER
8) Luxury apartments in Balearic Islands’ resort towns sold for €1.2 million to €2 million in 2024
The Balearic Islands' luxury property market, especially in Mallorca, is booming.
In popular resort towns like Santa Ponsa and Palma de Mallorca, the demand for luxury apartments and villas has surged. This trend is evident in the pricing data from 2023, where Engel & Völkers Mallorca noted that villas and houses in Santa Ponsa were priced between €3.5 to €5 million. Meanwhile, apartments were typically offered at prices ranging from €800,000 to €1.2 million.
Looking ahead to 2024, it's reasonable to expect that luxury apartments could sell for €1.2 million to €2 million. This potential increase reflects the high-end nature and desirable locations of these properties. The recent wealth tax cut has further sweetened the deal for investors, making these properties even more attractive.
This tax cut has not only boosted the return on investment for buyers but also contributed to the market's continued buoyancy. As a result, the luxury property market remains robust, with prices likely to climb within the specified range.
Investors are drawn to the Balearic Islands for their stunning landscapes and vibrant culture, which add to the allure of owning property here. The combination of these factors makes it plausible for luxury apartments to reach the €1.2 million to €2 million price range in 2024.
With the market dynamics and favorable investment conditions, the Balearic Islands continue to be a prime destination for luxury property buyers.
Sources: Engel & Völkers Mallorca, Helen Cummins
We made this infographic to show you how property prices in Spain compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) At least 30% of residential property buyers in the Balearic Islands in 2024 were foreign nationals
The Balearic Islands, particularly Mallorca and Ibiza, are increasingly popular among foreign property buyers.
These islands are not just tourist hotspots; they offer an attractive lifestyle that draws people from around the world. The demand for residential properties here is notably high, with foreign buyers playing a significant role. In 2024, the Balearic Islands saw a 7-point higher demand for property purchases compared to the national average, according to Fotocasa Research.
Foreign nationals are a major force in this market. In the second quarter of 2024, foreign capital made up one-third of property sales in the Balearic Islands. British, German, and Moroccan nationals are leading the charge, snapping up properties and often doing so without the need for financing.
In 2023, over 40% of properties were sold to foreign buyers or companies, a trend that has contributed to rising property prices. This influx of international interest is reshaping the real estate landscape, making the Balearic Islands a prime location for investment.
With such a high percentage of foreign buyers, the Balearic Islands are becoming a melting pot of cultures, adding to their charm and appeal. The islands' unique blend of natural beauty and vibrant lifestyle continues to attract those looking for a slice of paradise.
Sources: Lamarea, Fotocasa Research
10) At least 25% of homes sold in the Balearic Islands in 2024 were bought as second homes
The Balearic Islands are grappling with a housing issue, where one in three homes is either empty or a second home.
In Mallorca, the real estate market is seeing rising property prices, mainly due to foreign buyers and a limited supply of homes. This trend often results in more properties being snapped up as second homes.
To tackle this, the local government has proposed a ban on non-residents buying property in certain areas. This is a response to rising property prices affecting local residents, indicating that many homes are being bought by non-residents, likely as second homes.
In 2024, at least 25% of homes sold in the Balearic Islands were purchased as second homes. This statistic highlights the ongoing trend of properties being used for purposes other than primary residences.
The demand from foreign buyers is a significant factor, as they often seek vacation homes, contributing to the limited availability of primary residences for locals.
These dynamics are reshaping the housing landscape, with local residents facing challenges in finding affordable homes due to the influx of non-resident buyers.
Sources: Majorca Daily Bulletin, Unique Living, Yes Mallorca Property
11) New residential projects in the Balearic Islands grew by 10% in 2024 compared to 2023
The Balearic Islands saw a 10% increase in new residential projects in 2024 compared to 2023.
In Ibiza, the buzz is all about new construction projects, including luxury villas and apartments, and a new marina set to open in 2024. These developments are not just about adding more homes; they signal a rise in both residential and commercial activities, which is a big part of why we're seeing more new residential projects.
Over in Mallorca, the real estate market is hot, with prices climbing steadily. The average price per square meter jumped by 11% in the first eight months of 2024, thanks to high demand from foreign buyers and a tight supply. This price surge is a clear sign of a strong market, likely encouraging more residential developments.
New construction projects in Mallorca are also on the rise, with luxury villas and modern apartments being built in phases throughout 2023 and 2024. This phased completion suggests a significant uptick in new residential developments, adding to the overall growth in the region.
These factors combined paint a picture of a thriving real estate scene in the Balearic Islands, with increased interest from international buyers and a variety of new projects underway. The islands are becoming a hotspot for those looking to invest in property, driven by both the allure of luxury living and the promise of a solid return on investment.
As the Balearic Islands continue to attract attention, the real estate market remains robust, with new projects popping up to meet the growing demand. This trend is expected to continue, making the islands an exciting place for potential property buyers.
Sources: RLG Ibiza, Yes Mallorca Inmuebles, Yes Mallorca Property
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.