Is right now a good time to buy a property in Palma de Mallorca? (2026)

Authored by the expert who managed and guided the team behind the Spain Property Pack

Yes, the analysis of Palma de Mallorca's property market is included in our pack

Fact-checked and reviewed by our local expert

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Torben Aagaard

Founder & CEO at PalmaMallorca.com

Torben has loved Palma de Mallorca for years and made it his home in 2019. With a passion for innovation and digital solutions, he helps people turn their dream of living in Palma into reality. As CEO, he leads many Mallorca-based ventures, making it easy for buyers, sellers, and service providers to connect.

Who is the author of this content?

INVESTROPA

A team specialized in real estate investing in European countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Palma de Mallorca. If you’d like to learn more about us, you can check our presentation page.

Is it smart to buy now in Palma de Mallorca, or should I wait as of 2026?

Do real estate prices look too high in Palma de Mallorca as of 2026?

As of early 2026, property prices in Palma de Mallorca look stretched compared to historical norms, with asking prices sitting at record highs of around 5,100 euros per square meter according to Idealista's December 2025 data.

One clear signal that prices are running hot is the year-on-year growth rate of about 14.5 percent in Palma de Mallorca, which is well above the long-term average pace for Spanish cities.

Another sign to watch is that Spain's official House Price Index from INE showed 12.8 percent annual growth in Q3 2025, meaning Palma de Mallorca is riding a national wave, not just a local bubble, though the island premium makes it even more pronounced.

You can also read our latest update regarding the housing prices in Palma de Mallorca.

Does a property price drop look likely in Palma de Mallorca as of 2026?

As of early 2026, the likelihood of a meaningful property price drop in Palma de Mallorca over the next 12 months looks low, mainly because the two classic crash ingredients, a credit blow-off and massive oversupply, simply aren't present.

A plausible range for Palma de Mallorca prices over the next year would be somewhere between a 5 percent dip in some segments and another 8 to 10 percent rise in high-demand neighborhoods, depending on how rates and demand evolve.

The single macro factor that could most increase the odds of a price drop in Palma de Mallorca would be a surprise spike in eurozone interest rates, since many buyers here rely on mortgage financing and higher rates would cool demand quickly.

However, with the European Central Bank signaling a stabilizing rate environment and inflation easing, a sharp rate increase looks unlikely in the near term, which keeps the crash scenario off the table for now.

Finally, please note that we cover the price trends for next year in our pack about the property market in Palma de Mallorca.

Could property prices jump again in Palma de Mallorca as of 2026?

As of early 2026, the likelihood of another price surge in Palma de Mallorca is medium, since supply remains tight and demand drivers like international buyers and lifestyle seekers haven't gone away.

A plausible upside range for Palma de Mallorca over the next 12 months would be an additional 5 to 10 percent gain, concentrated in premium neighborhoods like Son Vida, Portixol, and Ciutat Antiga where scarcity is most acute.

The single biggest demand-side trigger that could push prices higher in Palma de Mallorca would be further rate cuts from the ECB, which would make mortgages cheaper and bring more buyers off the sidelines.

Please also note that we regularly publish and update real estate price forecasts for Palma de Mallorca here.

Are we in a buyer or a seller market in Palma de Mallorca as of 2026?

As of early 2026, Palma de Mallorca remains closer to a seller's market, since prices are at record highs and well-priced homes in desirable neighborhoods tend to attract competition quickly.

Palma de Mallorca doesn't publish a clean months-of-inventory figure, but when prices are rising 14 percent annually and sitting at historic peaks, that typically signals inventory is well below what would be needed for buyers to have real leverage, probably under 4 months of supply in practical terms.

The share of listings with price reductions in Palma de Mallorca appears limited in prime areas, though overpriced properties do sit longer, which means sellers still have leverage on quality homes but buyers can negotiate hard on ambitious asking prices.

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.

Are homes overpriced, or fairly priced in Palma de Mallorca as of 2026?

Are homes overpriced versus rents or versus incomes in Palma de Mallorca as of 2026?

As of early 2026, homes in Palma de Mallorca look moderately overpriced when you compare purchase costs to local incomes, though the math is more balanced when measured against rents because rental yields remain reasonable.

The price-to-rent ratio in Palma de Mallorca works out to roughly 23 years of rent to equal the purchase price, which is above the 15 to 20 year range typically seen in balanced markets, but not at bubble extremes.

The price-to-income multiple in Palma de Mallorca is elevated for local workers, since a typical 80 square meter apartment at around 407,000 euros requires many years of median household income, making affordability a real squeeze for residents who don't have outside wealth or help.

Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Palma de Mallorca.

Are home prices above the long-term average in Palma de Mallorca as of 2026?

As of early 2026, property prices in Palma de Mallorca are clearly above the long-term average, with Idealista flagging December 2025 as a record high for the city's asking price index.

The recent 12-month price change in Palma de Mallorca of about 14.5 percent is roughly double the pre-pandemic pace, which averaged closer to 5 to 7 percent annually in strong years, indicating the market is running hotter than normal.

In inflation-adjusted terms, Palma de Mallorca prices are likely at or near their prior cycle peak from the mid-2000s boom, though the current run-up feels more demand-driven than credit-fueled compared to that earlier era.

What local changes could move prices in Palma de Mallorca as of 2026?

Are big infrastructure projects coming to Palma de Mallorca as of 2026?

As of early 2026, the biggest infrastructure project likely to impact Palma de Mallorca property prices is the Port of Palma transformation plan, announced in December 2025, which aims to integrate the waterfront better with the city and could boost values in nearby neighborhoods like Portixol, Santa Catalina, and the Old Town.

The timeline for this port-city integration project in Palma de Mallorca is still in early stages, with detailed planning and approvals expected over 2026 and construction likely spanning several years, meaning the full impact on property prices will unfold gradually rather than immediately.

For the latest updates on the local projects, you can read our property market analysis about Palma de Mallorca here.

Are zoning or building rules changing in Palma de Mallorca as of 2026?

The most important zoning change being discussed in Palma de Mallorca is Decree-Law 3/2025, which creates a fast-track framework for strategic residential projects to unlock new land for housing in the city.

As of early 2026, the net effect of these zoning changes in Palma de Mallorca should be modestly positive for prices in the medium term, since more supply takes years to materialize, but the announcement itself signals that authorities recognize the shortage and are trying to address it.

The areas most affected by these rule changes in Palma de Mallorca will likely be peripheral zones where developable land exists, rather than the established central neighborhoods like Ciutat Antiga or Santa Catalina where density is already high.

Are foreign-buyer or mortgage rules changing in Palma de Mallorca as of 2026?

As of early 2026, the direction of foreign-buyer and mortgage rules in Palma de Mallorca is one of heightened regulatory attention rather than dramatic new restrictions, with the Bank of Spain signaling closer oversight of lending growth but no outright bans or severe limits announced.

The most likely foreign-buyer rule change being discussed in Spain involves potential restrictions on non-EU buyers purchasing residential property, though nothing concrete has been enacted yet and the Balearic Islands would feel any such change more than most regions given their high foreign-buyer share.

On the mortgage side, the most likely change being considered in Spain involves tighter stress-testing requirements and closer monitoring of loan-to-value ratios, which would affect buyers relying on high leverage but wouldn't dramatically shift the market.

You can also read our latest update about mortgage and interest rates in Spain.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Spain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.

Will it be easy to find tenants in Palma de Mallorca as of 2026?

Is the renter pool growing faster than new supply in Palma de Mallorca as of 2026?

As of early 2026, renter demand in Palma de Mallorca appears to be growing faster than new rental supply, which is why asking rents have climbed to around 18 euros per square meter and are still rising at over 6 percent year-on-year.

The clearest signal of renter demand in Palma de Mallorca is the continued inflow of workers in tourism, hospitality, and services, plus a steady stream of relocating professionals and digital nomads drawn to the island lifestyle.

On the supply side, new rental completions in Palma de Mallorca remain constrained because much of the new construction targets the sales market or holiday rentals, leaving the long-term rental pool undersupplied relative to demand.

Are days-on-market for rentals falling in Palma de Mallorca as of 2026?

As of early 2026, days-on-market for well-priced long-term rentals in Palma de Mallorca appear to be short, since rents are high and still climbing, which typically signals that decent units get snapped up quickly.

The difference in leasing speed between Palma de Mallorca's best areas like Santa Catalina, Portixol, and the Old Town versus weaker peripheral zones can be significant, with prime-area rentals often finding tenants within days while less desirable listings may sit for weeks.

One common reason days-on-market falls in Palma de Mallorca is the chronic undersupply of legal, long-term rental units, since many properties are diverted to holiday rentals or kept off the market entirely.

Are vacancies dropping in the best areas of Palma de Mallorca as of 2026?

As of early 2026, vacancy rates in Palma de Mallorca's best rental neighborhoods like Santa Catalina, Son Armadans, Portixol, and Ciutat Antiga appear very tight, consistent with high rents and strong year-on-year rent growth.

Prime areas in Palma de Mallorca likely have vacancy rates well below the city average, since these neighborhoods combine walkability, lifestyle appeal, and proximity to the waterfront, which makes them first choice for both locals and relocating professionals.

One practical sign that Palma de Mallorca's best areas are tightening first is that landlords in neighborhoods like Santa Catalina can now afford to be selective about tenants, asking for longer lease commitments or higher deposits, because they know another qualified renter is waiting.

By the way, we've written a blog article detailing what are the current rent levels in Palma de Mallorca.

Am I buying into a tightening market in Palma de Mallorca as of 2026?

Is for-sale inventory shrinking in Palma de Mallorca as of 2026?

As of early 2026, it's hard to cite an exact inventory count for Palma de Mallorca, but the observable outcome is clear: prices are at record highs and rising fast, which strongly suggests available supply is not keeping pace with buyer demand.

While Palma de Mallorca doesn't publish a clean months-of-supply figure, the combination of 14.5 percent annual price growth and record asking prices points to a market operating well below the 6-month inventory level typically associated with balanced conditions.

The single most likely reason inventory is tight in Palma de Mallorca is the structural shortage of buildable land on an island with high environmental protections and competing uses, plus owners who are reluctant to sell when prices keep climbing.

Are homes selling faster in Palma de Mallorca as of 2026?

As of early 2026, correctly priced homes in Palma de Mallorca's desirable neighborhoods appear to be selling relatively quickly, though overpriced listings can sit for months, creating a split market where quality and pricing discipline determine speed.

Year-over-year, selling times in Palma de Mallorca for well-located, fairly priced properties have likely compressed as demand remains strong, while the gap between fast-moving and slow-moving listings has probably widened as buyers become more selective at record prices.

Are new listings slowing down in Palma de Mallorca as of 2026?

As of early 2026, we don't have a precise year-on-year new listings count for Palma de Mallorca, but the policy push to unlock land via strategic residential projects is essentially an admission that getting enough supply onto the market has been difficult.

Palma de Mallorca typically sees a seasonal pattern where listings pick up in spring and slow in winter, but the current level appears unusually constrained given how aggressively prices have risen, suggesting owners are holding back more than normal.

The most plausible reason new listings are slow in Palma de Mallorca is that existing owners see no urgency to sell when prices keep climbing, plus many have favorable legacy mortgage rates they don't want to give up by moving.

Is new construction failing to keep up in Palma de Mallorca as of 2026?

As of early 2026, new construction in Palma de Mallorca is clearly failing to keep up with household demand, which is why prices have surged to record levels and why the regional government has introduced emergency land measures.

The recent trend in building permits and completions across Spain shows construction activity recovering but still below pre-crisis peaks, and the Balearic Islands face even tighter constraints due to land scarcity and environmental regulations.

The single biggest bottleneck limiting new construction in Palma de Mallorca is the availability of developable land, since the island's geography, protected areas, and complex planning processes make it much harder to bring new supply online compared to mainland Spanish cities.

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.

Will it be easy to sell later in Palma de Mallorca as of 2026?

Is resale liquidity strong enough in Palma de Mallorca as of 2026?

As of early 2026, resale liquidity in Palma de Mallorca is generally strong for well-located, fairly priced properties, since the city benefits from a diverse buyer pool that includes locals, mainland Spanish buyers, and international purchasers.

While exact median days-on-market data for Palma de Mallorca resales isn't published in a single clean series, a healthy liquidity benchmark would be under 90 days, and prime neighborhoods likely clear faster than that while overpriced homes can take much longer.

The property characteristic that most improves resale liquidity in Palma de Mallorca is location in a walkable, lifestyle-rich neighborhood like Santa Catalina, Portixol, or Ciutat Antiga, where both local and international buyers consistently compete for limited stock.

Is selling time getting longer in Palma de Mallorca as of 2026?

As of early 2026, selling times in Palma de Mallorca may be starting to stretch slightly for overpriced listings, since buyers at record-high prices are becoming more selective, though well-priced quality homes still move normally.

The current realistic range for days-on-market in Palma de Mallorca probably spans from under 30 days for prime, correctly priced properties to 6 months or more for overpriced or compromised listings, reflecting a bifurcated market.

One clear reason selling time can lengthen in Palma de Mallorca is affordability pressure, since as prices climb to record highs, the pool of buyers who can comfortably afford a purchase shrinks, and sellers who don't adjust their expectations end up waiting longer.

Is it realistic to exit with profit in Palma de Mallorca as of 2026?

As of early 2026, the likelihood of exiting with a profit in Palma de Mallorca is medium to high if you hold for 7 to 10 years or more, since the structural demand drivers and supply constraints support long-term appreciation, but short-term flips at record prices carry real risk.

A realistic minimum holding period in Palma de Mallorca to comfortably exit with profit would be at least 5 to 7 years, which gives you time to absorb transaction costs and ride out any short-term price softness.

The total round-trip cost drag in Palma de Mallorca, covering purchase taxes, notary fees, registration, agency commissions, and selling costs, typically runs 10 to 13 percent of the property value, roughly 40,000 to 53,000 euros on a 400,000 euro home, or about 43,000 to 57,000 USD.

One clear factor that most increases profit odds in Palma de Mallorca is buying below market value through patient negotiation on overpriced listings, since in a record-high market your entry price matters more than ever for your eventual return.

What sources have we used to write this blog article?

Whether it's in our blog articles or the market analyses included in our property pack about Palma de Mallorca, we always rely on the strongest methodology we can ... and we don't throw out numbers at random.

We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.

Source	Why it's authoritative	How we used it
Idealista (sale prices)	Spain's largest property portal with transparent, regularly updated price indices.	We used it to anchor Palma de Mallorca's current asking price level and identify record-high signals. We also used its neighborhood breakdown to show price dispersion across the city.
Idealista (rent prices)	The most widely followed rent index in Spain with consistent methodology.	We used it to estimate gross yields and assess rent momentum in Palma de Mallorca. We also used it to compare price growth versus rent growth as an overheating check.
INE House Price Index	Spain's official national statistics office providing the core official house price series.	We used it to anchor the Spain-wide price cycle as of late 2025. We also used new versus existing home splits to judge whether Palma de Mallorca's surge is broad-based.
European Central Bank	The monetary authority for the eurozone publishing standardized interest rate statistics.	We used it to frame the financing backdrop and assess how sensitive buyers are to rate changes. We also used it to judge whether rates support or constrain prices.
BBVA Research	A major bank research unit publishing full reports with macro and housing models.	We used it to frame Spain's 2026 baseline outlook and supply-demand dynamics. We also used it to cross-check that our price direction logic aligns with mainstream research.
CaixaBank Research	Another major Spanish bank research team providing independent forecasts.	We used it to triangulate outlook and key market drivers like rates, employment, and supply gaps. We also used it to avoid relying on a single bank's view.
Colegio de Registradores	Property registrars record actual transactions, providing close-to-market statistics.	We used it to ground the cycle in transaction-based evidence rather than just listings. We also used it to assess foreign-buyer weight in the Balearics.
BOE (Official Gazette)	Spain's official legal publication providing verifiable regulatory references.	We used it to confirm the existence of Decree-Law 3/2025 on strategic residential projects. We also used it to discuss supply-side policy direction with a proper legal source.
Port Authority of the Balearic Islands	The official body managing the port, making project announcements primary source.	We used it to identify the port transformation as an infrastructure catalyst. We also used it to explain where waterfront demand could concentrate.
Aena	The airport operator providing official project details for Palma de Mallorca airport.	We used it to validate that Palma de Mallorca's main connectivity asset is being upgraded. We also used it to frame tourism and second-home demand without relying on hearsay.
Tinsa	A long-running Spanish appraisal firm with systematic methodology and historical data.	We used it to compare the Balearics to long-run price cycles. We also used it to validate that Palma de Mallorca's market is structurally premium versus Spain overall.
INE Household Income Atlas	Official income data from administrative and statistical sources for local comparisons.	We used it to estimate affordability and price-to-income pressure. We also used it to keep income assumptions anchored to official statistics rather than anecdotes.
MIVAU Statistics Hub	Spain's Housing Ministry publishing official housing statistics and methodology.	We used it as a source-of-truth directory for official data series. We also used it to keep our official data trail verifiable.
Reuters	A trusted global news agency reporting on central bank actions and financial regulation.	We used it to assess Bank of Spain's monitoring stance on mortgage growth. We also used it to gauge systemic risk levels versus the pre-2007 crisis period.

We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Spain. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.