What are the price trends and forecasts in Palma de Mallorca right now? (2026)

Palma de Mallorca's property market is one of the hottest in Spain right now, with prices climbing faster than in most mainland cities.

In this article, we break down the current housing prices in Palma de Mallorca, explain what's driving them, and share our forecasts for 2026 and beyond.

We constantly update this blog post to reflect the latest data and trends in the Palma de Mallorca real estate market.

And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Palma de Mallorca.

Fact-checked and reviewed by our local expert

✓✓✓

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.

What are the current property price trends in Palma de Mallorca as of 2026?

What is the average house price in Palma de Mallorca as of 2026?

As of early 2026, the typical transaction price for a home in Palma de Mallorca is around 385,000 euros (approximately 415,000 US dollars), based on an average size of about 90 square meters.

When we look at price per square meter, Palma de Mallorca properties typically trade at around 4,300 euros per square meter (roughly 4,650 US dollars per square meter), though this figure can vary depending on condition, location, and amenities like parking or a terrace.

If you're trying to get a sense of the realistic range, about 80% of property purchases in Palma de Mallorca fall between 220,000 euros and 650,000 euros (roughly 240,000 to 700,000 US dollars), with the lower end covering smaller apartments in outer neighborhoods and the higher end reaching renovated units in prime central locations.

How much have property prices increased in Palma de Mallorca over the past 12 months?

Property prices in Palma de Mallorca increased by approximately 14% to 15% over the past 12 months, which is notably higher than the Spanish national average of around 13%.

Depending on the property type and neighborhood, price increases in Palma de Mallorca ranged from about 10% for some luxury villas to over 30% in fast-growing inner-ring districts like Llevant and La Soledat.

The single biggest factor driving this price surge in Palma de Mallorca has been the persistent shortage of available homes, as the island's geography limits new construction while demand from both local buyers and international relocators remains strong.

Which neighborhoods have the fastest rising property prices in Palma de Mallorca as of 2026?

As of early 2026, the three neighborhoods with the fastest rising property prices in Palma de Mallorca are Llevant and La Soledat, Es Forti and Son Cotoner and Son Dameto, and Rafal and Son Forteza.

Llevant and La Soledat recorded an impressive 34% annual price growth, while Es Forti and Son Cotoner and Son Dameto grew by about 21%, and Rafal and Son Forteza saw prices climb roughly 19% year-on-year in Palma de Mallorca.

The main demand driver behind these fast-rising neighborhoods in Palma de Mallorca is spillover from buyers who can no longer afford the city center or seafront areas, combined with ongoing renovation activity that is upgrading the housing stock in these districts.

By the way, you will find much more detailed price ranges across neighborhoods in our property pack covering the real estate market in Palma de 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.

Which property types are increasing faster in value in Palma de Mallorca as of 2026?

As of early 2026, the ranking of property types by appreciation rate in Palma de Mallorca is: renovated resale apartments leading the pack, followed by townhouses, then condos in new developments, and finally detached villas and chalets.

Renovated resale apartments in well-located Palma de Mallorca neighborhoods are appreciating at roughly 15% to 20% annually, outpacing other property types by a significant margin.

The main reason apartments are outperforming in Palma de Mallorca is that the most desirable, walkable neighborhoods have very limited supply of quality resale stock, so competition among buyers pushes prices up faster than for other property types.

Finally, if you're interested in a specific property type, you will find our latest analyses here:

• How much do properties cost in Palma de Mallorca?
• How much should you pay for an apartment in Palma de Mallorca?
• How much should you pay for a studio in Palma de Mallorca?

What is driving property prices up or down in Palma de Mallorca as of 2026?

As of early 2026, the top three factors driving property prices in Palma de Mallorca are the chronic shortage of available homes, improved financing conditions compared to 2023 and 2024, and strong international demand from lifestyle buyers and remote workers.

The single factor with the strongest upward pressure on Palma de Mallorca property prices is the supply shortage, because the island's geography limits new construction and existing homeowners are reluctant to sell in a rising market.

If you want to understand these factors at a deeper level, you can read our latest property market analysis about Palma de Mallorca here.

What is the property price forecast for Palma de Mallorca in 2026?

How much are property prices expected to increase in Palma de Mallorca in 2026?

As of early 2026, we expect property prices in Palma de Mallorca to increase by approximately 6% to 9% over the course of the year.

Forecasts from different analysts for Palma de Mallorca property price growth in 2026 range from a conservative 5% to a more optimistic 10%, depending on assumptions about interest rates and international demand.

The main assumption underlying most price increase forecasts for Palma de Mallorca is that housing supply will remain constrained while mortgage rates stay at current levels or decline slightly, keeping buyer demand robust.

We go deeper and try to understand how solid are these forecasts in our pack covering the property market in Palma de Mallorca.

Which neighborhoods will see the highest price growth in Palma de Mallorca in 2026?

As of early 2026, the neighborhoods expected to see the highest price growth in Palma de Mallorca are Llevant and La Soledat, Rafal and Son Forteza, and Es Forti and Son Cotoner and Son Dameto.

These top neighborhoods in Palma de Mallorca could see projected price growth of 10% to 15% in 2026, building on the strong momentum they showed throughout 2025.

The primary catalyst driving expected growth in these Palma de Mallorca neighborhoods is the combination of still-affordable entry prices compared to prime areas, ongoing renovation activity, and strong demand from buyers seeking value.

One emerging neighborhood in Palma de Mallorca that could surprise with higher-than-expected growth is Playa de Palma, which benefits from tourism-driven demand and infrastructure upgrades that are gradually improving its residential appeal.

By the way, we've written a blog article detailing what are the current best areas to invest in property in Palma de Mallorca.

What property types will appreciate the most in Palma de Mallorca in 2026?

As of early 2026, renovated resale apartments and condos are expected to appreciate the most in Palma de Mallorca, followed closely by townhouses in family-friendly locations.

The top-performing property type in Palma de Mallorca could see appreciation of 8% to 12% in 2026, driven by the extreme scarcity of quality, move-in-ready units in desirable neighborhoods.

The main demand trend driving appreciation for apartments in Palma de Mallorca is the preference among buyers for walkable, lifestyle-oriented locations with amenities like lifts, terraces, and proximity to restaurants and shops.

Detached villas and luxury chalets in Palma de Mallorca are expected to underperform relative to other property types because they depend on a narrower pool of high-net-worth buyers and are already priced at premium levels.

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.

How will interest rates affect property prices in Palma de Mallorca in 2026?

As of early 2026, the lower interest rate environment compared to 2023 and 2024 is supporting property prices in Palma de Mallorca by making mortgages more affordable and keeping buyer demand strong.

The Euribor reference rate, which most Spanish variable-rate mortgages track, has dropped significantly from its peak, and mortgage rates in Palma de Mallorca are expected to remain stable or decline slightly through 2026.

A 1% change in interest rates typically affects property affordability in Palma de Mallorca by shifting monthly mortgage payments by roughly 100 to 150 euros per 100,000 euros borrowed, which can meaningfully expand or contract the pool of qualified buyers.

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

What are the biggest risks for property prices in Palma de Mallorca in 2026?

As of early 2026, the three biggest risks for property prices in Palma de Mallorca are an affordability squeeze that triggers political intervention, regulatory changes affecting rental properties, and a broader European economic slowdown that reduces international demand.

The single risk with the highest probability of materializing in Palma de Mallorca is regulatory tightening around housing and rentals, as local and regional governments face growing pressure to address housing affordability for residents.

We actually cover all these risks and their likelihoods in our pack about the real estate market in Palma de Mallorca.

Is it a good time to buy a rental property in Palma de Mallorca in 2026?

As of early 2026, buying a rental property in Palma de Mallorca can be a good decision if you prioritize long-term capital appreciation over immediate rental yield, since gross yields in prime areas look modest at current price levels.

The strongest argument in favor of buying a rental property now in Palma de Mallorca is that supply constraints are unlikely to ease soon, so property values should continue to appreciate and protect your investment against inflation.

The strongest argument for waiting before buying a rental property in Palma de Mallorca is that current prices are at record highs, which leaves less room for error if the market cools or if new regulations reduce rental income potential.

If you want to know our latest analysis (results may differ from what you just read), you can read our assessment on whether now is a good time to buy a property in Palma de Mallorca.

You'll also find a dedicated document about this specific question in our pack about real estate in Palma de Mallorca.

Where will property prices be in 5 years in Palma de Mallorca?

What is the 5-year property price forecast for Palma de Mallorca as of 2026?

As of early 2026, we estimate that property prices in Palma de Mallorca will grow by 25% to 35% cumulatively over the next five years, bringing prices significantly higher by 2031.

The range of 5-year forecasts for Palma de Mallorca spans from a conservative 10% to 20% cumulative gain if Europe slows sharply, to an optimistic 40% or more if supply stays frozen and rates remain low.

This translates to a projected average annual appreciation rate of roughly 4.5% to 6% per year over the next five years in Palma de Mallorca, which is above the long-term European average.

The key assumption most forecasters rely on for their 5-year Palma de Mallorca predictions is that the island's chronic housing shortage will persist, since geographic constraints and slow planning processes make it very difficult to meaningfully increase supply.

Which areas in Palma de Mallorca will have the best price growth over the next 5 years?

The top three areas in Palma de Mallorca expected to have the best price growth over the next five years are Llevant and La Soledat, Rafal and Son Forteza, and selected parts of Playa de Palma where upgrades are underway.

These top-performing areas in Palma de Mallorca could see projected 5-year cumulative price growth of 35% to 50%, as they benefit from spillover demand and ongoing neighborhood improvements.

This is broadly consistent with our shorter-term forecast, though over five years these inner-ring Palma de Mallorca neighborhoods have more room to close the gap with premium areas, which is why their percentage gains may be higher.

The currently undervalued area in Palma de Mallorca with the best potential for outperformance over five years is parts of Llevant, where renovation activity and improved amenities could meaningfully re-rate property values.

What property type will give the best return in Palma de Mallorca over 5 years as of 2026?

As of early 2026, renovated resale apartments in well-located Palma de Mallorca neighborhoods are expected to give the best total return over five years, combining solid appreciation with steady rental demand.

The projected 5-year total return for this top-performing property type in Palma de Mallorca could reach 40% to 55%, including both price appreciation and cumulative rental income over the period.

The main structural trend favoring apartments in Palma de Mallorca over the next five years is the growing preference among buyers and renters for walkable, urban locations with easy access to amenities, which plays directly to the strengths of quality apartment stock.

For investors seeking a balance of return and lower risk over five years in Palma de Mallorca, townhouses in family-friendly neighborhoods offer a compelling combination of scarcity-driven appreciation and stable demand from families.

How will new infrastructure projects affect property prices in Palma de Mallorca over 5 years?

The top three major infrastructure projects expected to impact property prices in Palma de Mallorca over the next five years are the Paseo Maritimo waterfront transformation, airport capacity and experience upgrades under Aena's investment program, and the potential Palma to airport rail link.

Properties near completed infrastructure projects in Palma de Mallorca typically command a price premium of 5% to 15% compared to similar properties without such access, based on patterns observed in other Spanish coastal cities.

The neighborhoods in Palma de Mallorca that will benefit most from these infrastructure developments are Santa Catalina and the seafront districts near the Paseo Maritimo, as well as any areas that gain improved transit connections if the rail project advances.

How will population growth and other factors impact property values in Palma de Mallorca in 5 years?

Palma de Mallorca's population growth rate is modest, but property demand is driven less by raw population numbers and more by who wants to live there, including remote workers, EU relocators, and lifestyle buyers seeking the island's quality of life.

The demographic shift with the strongest influence on property demand in Palma de Mallorca is the influx of higher-income international residents and remote workers, who can afford premium prices and prioritize location and lifestyle over pure affordability.

Migration patterns, both domestic and international, are expected to continue supporting property values in Palma de Mallorca over five years, as the island remains an attractive destination for those seeking a Mediterranean lifestyle with good connectivity to European cities.

The property types and areas in Palma de Mallorca that will benefit most from these demographic trends are apartments in walkable central neighborhoods and townhouses near international schools, which appeal directly to the relocating professional demographic.

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.

What is the 10 year property price outlook in Palma de Mallorca?

What is the 10-year property price prediction for Palma de Mallorca as of 2026?

As of early 2026, we estimate that property prices in Palma de Mallorca will grow by 40% to 70% cumulatively over the next 10 years, reaching significantly higher levels by 2036.

The range of 10-year forecasts for Palma de Mallorca spans from a conservative 25% to 35% if Europe experiences prolonged economic challenges, to an optimistic 80% or more if conditions remain favorable and supply stays constrained.

This translates to a projected average annual appreciation rate of roughly 3.5% to 5.5% per year over the next decade in Palma de Mallorca, with at least one market slowdown likely during this period.

The biggest uncertainty factor in making 10-year property price predictions for Palma de Mallorca is the direction of European interest rates and economic conditions, which can shift dramatically over a decade and have an outsized impact on island markets that depend on international demand.

What long-term economic factors will shape property prices in Palma de Mallorca?

The top three long-term economic factors that will shape property prices in Palma de Mallorca over the next decade are tourism and international connectivity, the euro-area interest rate environment, and the island's structural supply constraints driven by geography and planning rules.

The single long-term economic factor with the most positive impact on property values in Palma de Mallorca is the island's enduring appeal as a lifestyle destination with excellent air connectivity, which supports sustained demand from European buyers regardless of short-term economic fluctuations.

The single long-term economic factor that poses the greatest structural risk to property values in Palma de Mallorca is the potential for significant regulatory intervention on housing and rentals, as affordability pressures on local residents could trigger policies that reduce investor returns.

You'll also find a much more detailed analysis in our pack about real estate in Palma de Mallorca.

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
INE House Price Index	Spain's national statistics office is the gold standard for official housing data.	We used it to anchor Spain-wide price growth and the new-build versus resale split. We then applied those patterns to estimate Palma de Mallorca's market dynamics.
INE Rental Reference Index (IRAV)	It's the official index used for legally-defined rent updates in Spain.	We used it to explain rental growth constraints in regulated contexts. We framed rental investment risk and rent-reset expectations for Palma de Mallorca.
MIVAU Appraised Housing Values	It's the central government's housing statistics program built from appraisal data.	We used it as a reality-check against asking prices. We triangulated with private indexes to estimate likely transaction levels in Palma de Mallorca.
Banco de Espana Financial Stability Report	Spain's central bank is the top official voice on housing and credit risks.	We used it to explain why some areas rise faster and what could cool the market. We framed overpricing signals for Palma de Mallorca as of the first half of 2026.
Banco de Espana Mortgage Reference Rates	It's the central bank's official publication of reference rates used by banks.	We used it to anchor the interest-rate environment households actually experience. We connected that to affordability and price pressure in Palma de Mallorca.
BOE Official Gazette (Euribor)	Spain's official gazette is the final word on published reference rates.	We used it to cite the January 2026 interest-rate reference context. We translated this into what it means for mortgage payments and buyer demand in Palma de Mallorca.
ECB Key Interest Rates	It's the primary source for euro-area policy rates that drive bank funding costs.	We used it to frame the macro backdrop behind mortgage pricing. We explained the likely knock-on effect for Palma de Mallorca demand in 2026.
Eurostat Housing Price Statistics	Eurostat is the EU's official statistics office with cross-country comparability.	We used it to benchmark Spain versus the EU housing cycle. We kept Palma de Mallorca's story grounded in the broader European context.
Idealista Palma Sale Prices	Spain's largest property portal with consistent methodology and granular data.	We used it for street-level pricing and neighborhood comparisons in Palma de Mallorca. We treated it as asking prices and cross-checked with appraisal series.
Idealista Palma Rent Prices	Large sample size with frequent updates and neighborhood-level detail.	We used it to estimate rental yields and rental momentum by zone. We combined it with sale data to judge where Palma de Mallorca prices look stretched.
Tinsa Palma Prices	A major Spanish valuer with a widely used and transparent methodology.	We used it as an appraisal-style middle ground between official data and portal asking prices. We triangulated it to produce our confident Palma de Mallorca estimate.
MIVAU State Rent Reference System	It's the Spanish government's official rent reference tool.	We used it to explain the direction of policy and market transparency for rents. We provided context for rental property decisions in Palma de Mallorca in 2026.
Balearic Islands Government (eBoib)	The official gazette of the Balearic Islands government.	We used it to frame local policy levers affecting supply. We connected policy constraints to Palma de Mallorca's housing shortage story.
Aena Airport Investment Program	Aena is the state-controlled airport operator with primary documentation.	We used it to justify infrastructure tailwinds from connectivity upgrades. We explained how better connectivity supports demand in Palma de Mallorca.
Port Authority Paseo Maritimo Project	Official project site from the Port Authority and Palma city partners.	We used it to ground the placemaking and waterfront upgrade story. We connected it to premium neighborhood demand near Palma de Mallorca's seafront.
BBVA Research Housing Observatory	A major Spanish bank's research division with respected housing analysis.	We used it to anchor our Spain-wide 2026 expectations. We adjusted their forecasts for Palma de Mallorca's unique supply constraints and demand profile.
INE Municipal Population Statistics	Spain's official statistics office tracks population at the municipal level.	We used it for population baseline data. We focused on demand composition rather than raw growth for Palma de Mallorca's property outlook.
Majorca Daily Bulletin	Local English-language news source covering Mallorca developments.	We used it to track progress on the Palma to airport rail project. We factored infrastructure timing risk into our neighborhood forecasts.