Is it worth it buying property in Palma de Mallorca in 2025?

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

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.

How this content was created 🔎📝

At INVESTROPA, we explore the Spanish real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Palma, Madrid, and Barcelona. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

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.

What kind of properties can you actually find in Palma—apartments, villas, townhouses, or something else?

Palma de Mallorca offers a diverse property portfolio that caters to different budgets and lifestyle preferences.

The most common property types include modern and renovated apartments throughout the city, with many featuring terraces and sea views. Penthouses with expansive terraces are particularly sought after, especially those offering Mediterranean vistas.

Luxury villas dominate exclusive areas like Son Vida, where properties often include private pools, gardens, and golf course access. Townhouses are available in both central neighborhoods and up-and-coming districts, offering a middle ground between apartments and villas.

For those seeking something unique, Palma also features historic palaces and character buildings in the Old Town, plus modern new developments with smart technology and energy-efficient features in areas like Santa Catalina, Son Espanyolet, and Nou Llevant.

The new development market is particularly active as of June 2025, focusing on high-end amenities and sustainable building practices.

Is it generally smarter to buy or rent in Palma right now?

Buying is generally the smarter financial decision if you plan to stay in Palma for at least five years, given the steady price appreciation and strong capital growth trends.

Property prices in the Balearics have risen significantly, with current data showing 55% higher prices compared to five years ago. This upward trajectory makes buying attractive for long-term wealth building.

However, renting offers more flexibility and requires lower upfront costs, making it suitable for newcomers or those uncertain about their long-term plans. The challenge with renting is that long-term rental properties are increasingly scarce and expensive, particularly in central Palma and popular districts.

For investors, buying makes sense due to strong rental demand from both long-term tenants and short-term vacation renters. For those relocating to Palma, renting first allows you to understand neighborhoods before committing to a purchase.

The decision ultimately depends on your timeline, financial situation, and commitment level to living in Palma.

How much did properties cost here 5 years ago, what are they going for now, and where are prices heading?

Property prices in Palma have experienced dramatic growth over the past five years, with current prices sitting 55% higher than in 2020.

As of June 2025, the average price per square meter in Palma ranges from €4,931 to €6,500, with coastal and luxury areas commanding premium rates. Properties in prime locations like Son Vida, Portixol, and the Old Town often exceed these averages significantly.

The 2024 market saw exceptional growth, with property prices rising between 11% and 19% in a single year. This surge was driven by limited supply, strong international demand, and Palma's growing reputation as a premium Mediterranean destination.

Looking ahead to the remainder of 2025 and beyond, experts predict continued but more moderate price growth. The rate of increase is expected to slow compared to 2024's exceptional performance, but prices will likely continue rising due to ongoing supply constraints and sustained demand from international buyers.

Well-located properties with energy-efficient features and luxury amenities are expected to outperform the broader market in terms of price appreciation.

What are the current trends in the Palma real estate market—demand, supply, new developments?

Demand in Palma's real estate market remains exceptionally strong, driven by a diverse international buyer base including Germans, Scandinavians, British nationals, and an increasing number of younger buyers and digital nomads.

Supply constraints continue to be the market's defining characteristic, particularly for coastal and central Palma properties. This limited inventory is the primary driver behind sustained price growth and competitive bidding situations.

New developments are focusing heavily on sustainability, smart home technology, and premium amenities. Key development hotspots include Santa Catalina, Son Espanyolet, Son Armadans, and Nou Llevant, where developers are creating modern residential complexes with contemporary designs and energy-efficient systems.

The rental market shows a clear split between booming short-term vacation rentals and high-demand long-term rentals, especially for families and remote workers. Short-term rental regulations require careful attention to licensing requirements.

It's something we develop in our Spain property pack.

What's the full step-by-step process of buying property in Palma as a foreigner?

The property purchase process in Palma follows a structured legal framework that foreign buyers must navigate carefully.

1. **Obtain an NIE (Foreigner's Identification Number)** - This is mandatory for any property transaction and must be secured before you can proceed with any purchase.2. **Open a Spanish bank account** - Required for property payments and ongoing expenses like utilities and taxes.3. **Property search and selection** - Work with reputable local agents, conduct thorough research, and arrange property viewings.4. **Property reservation** - Sign a reservation or option contract and pay a deposit, typically around 10% of the purchase price.5. **Due diligence phase** - Your lawyer conducts comprehensive legal checks including property status, outstanding debts, and planning permissions.6. **Secure financing** - Spanish banks typically offer up to 70% financing to non-resident buyers, though this varies by bank and property type.7. **Sign the public deed** - Complete the final transaction before a notary, make the remaining payment, and officially transfer the property title.8. **Property registration and utilities transfer** - Register the property in your name and transfer utility accounts to your ownership.

Which real estate agencies or platforms are actually good for finding property in Palma?

Several established agencies dominate Palma's real estate market, offering professional service and extensive property portfolios.

**Balearic Properties Mallorca** stands out as the official Savills associate, providing comprehensive coverage across all property types and budgets. **DAHLER & COMPANY** specializes in luxury properties and offers excellent service for high-end buyers.

Other reputable agencies include **Vogue Properties of Mallorca**, **Minkner & Partner**, **John Taylor Real Estate Agency**, **First Mallorca**, and **Home Concept Mallorca**. These agencies are recognized for their professionalism, local market expertise, and wide-ranging property portfolios.

For online property searches, major platforms include **SpainHouses.net** and **Yes Mallorca Property**, which offer comprehensive listings with detailed property information and photos.

When selecting an agency, prioritize those with established local presence, multilingual staff, and proven track records with international clients. The best agencies provide full-service support including legal guidance, financing assistance, and post-purchase property management services.

What kind of property can you expect to get within different budgets—say €200k, €500k, €1M+?

Property expectations in Palma vary significantly based on budget levels, with location and property type being the primary determining factors.

Budget Range	Property Type	Location & Features
€200k–€300k	Small apartments, studios	Less central areas, up-and-coming neighborhoods, basic amenities
€300k–€500k	1-2 bedroom apartments, small townhouses	Secondary districts, some renovated properties, possible sea views
€500k–€750k	Larger apartments, penthouses	Better locations, terraces, some central areas, modern amenities
€750k–€1M	Luxury apartments, small villas	Prime areas, sea views, pools, high-end finishes
€1M+	Luxury villas, penthouses, historic properties	Son Vida, Portixol, Old Town, pools, gardens, premium amenities
€2M+	Exclusive villas, palatial properties	Prime waterfront, extensive grounds, luxury features
€3M+	Ultra-luxury estates	Exclusive locations, private access, exceptional amenities

What are the most common mistakes people make when buying here, and how do you avoid them?

Property buyers in Palma frequently encounter preventable pitfalls that can result in significant financial losses or legal complications.

The most critical mistake is failing to research the property's legal status thoroughly. Always obtain a "nota simple" from the Land Registry and hire a specialist property lawyer to conduct comprehensive due diligence checks.

Many buyers ignore local planning regulations, particularly in rural or protected areas where building restrictions may limit future modifications or developments. Understanding these constraints before purchase is essential.

Financing-related errors include not securing pre-approval early in the process, which can result in losing preferred properties to better-prepared buyers. Spanish banks typically require extensive documentation from foreign buyers.

Skipping professional property inspections, especially for older or rural properties, can lead to unexpected repair costs. Technical surveys should be commissioned for all significant purchases.

Rushing decisions due to market pressure often results in poor choices. Take time to consult professionals, compare options, and understand all aspects of the transaction before committing.

Finally, overlooking community fees and existing property debts can create financial surprises. Always verify the property's financial obligations before signing any contracts.

What's the cost of living like in Palma—from groceries and transport to taxes and maintenance?

Living costs in Palma are higher than mainland Spain but remain reasonable compared to other premium European destinations.

Grocery costs exceed those in mainland Spanish cities due to island logistics, but the quality of local produce and international food options is excellent. Weekly grocery shopping for a couple typically ranges from €80-150 depending on preferences and shopping locations.

Transportation in Palma is efficient and affordable, with comprehensive public bus networks and reasonable taxi rates. Many residents find car ownership unnecessary in central areas, though it becomes more useful for exploring the broader island.

Property-related taxes include purchase taxes and fees that add 10-15% to the purchase price. Annual property taxes (IBI) vary by location and property value, typically ranging from €500-2000 annually for most residential properties.

Maintenance costs depend on property type—apartments in community buildings have monthly fees ranging from €50-200, while private villas require higher maintenance budgets for pools, gardens, and general upkeep.

Utility costs are reasonable, with electricity, water, and internet typically totaling €100-200 monthly for average households.

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.

Which areas in Palma are affordable, which ones are up-and-coming, and which are considered upscale—and what are the pros and cons of each?

Area Category	Neighborhoods	Pros & Cons
Upscale	Son Vida, Palma Old Town	Pros: Luxury amenities, prime locations, prestige Cons: High prices, limited parking, competitive market
Up-and-Coming	Portixol/El Molinar, Santa Catalina, Son Armadans	Pros: Growth potential, trendy atmosphere, good connectivity Cons: Rising prices, construction activity, gentrification
Affordable	S'Arenal, Es Molinar outskirts	Pros: Lower entry costs, good infrastructure, transport links Cons: Less prestigious, fewer luxury amenities, tourist-heavy
Emerging Luxury	Nou Llevant	Pros: New developments, modern amenities, beach proximity Cons: Ongoing construction, unproven area, higher risk
Historic Premium	Casco Antiguo	Pros: Cultural significance, unique architecture, central location Cons: Renovation restrictions, noise, parking challenges

What's life like in Palma as an expat—community, safety, bureaucracy, quality of life?

Expat life in Palma offers an exceptional quality of life with a welcoming international community and Mediterranean lifestyle benefits.

The expat community is large and diverse, including significant German, British, and Scandinavian populations, plus growing numbers of digital nomads from various countries. This diversity creates an international atmosphere with multiple language communities and cultural events.

Safety levels in Palma are excellent, with low crime rates and a generally secure environment for residents and visitors. The city maintains effective policing and emergency services, contributing to a stable living environment.

Bureaucratic processes can be slow and complex, particularly for residency permits, tax registrations, and property transactions. Having a local lawyer or gestor (administrative specialist) significantly helps navigate Spanish administrative requirements.

Quality of life factors include excellent year-round climate, outstanding healthcare services, good international schools, and abundant leisure activities. The city combines modern amenities with historic charm, offering everything from cultural events to outdoor sports.

It's something we develop in our Spain property pack.

If I wanted to rent the property long-term, which areas are best, what kind of tenants are out there, what do they want, and how much rental income and yield can I realistically expect?

Long-term rental properties perform best in central areas with good connectivity, modern amenities, and proximity to business districts and international schools.

**Best rental areas** include Santa Catalina for its international appeal, Palma Old Town for historic charm, Portixol for sea views and lifestyle appeal, Son Armadans for family-friendly environments, and Nou Llevant for modern amenities.

**Tenant demographics** include a mix of international professionals, local families, digital nomads, and seasonal workers. Many tenants are expatriate families seeking long-term stability, young professionals in the growing tech and service sectors, and remote workers who value Palma's lifestyle and connectivity.

**Tenant preferences** consistently include modern amenities, reliable high-speed internet, proximity to public transport, outdoor space (balconies or terraces), and sea or garden views when possible. Air conditioning and parking are highly valued.

**Rental income expectations** vary by location and property type. One to two-bedroom apartments in central Palma typically rent for €1,000–€2,000 monthly, while luxury properties and villas command significantly higher rates, often €2,500–€5,000+ depending on location and amenities.

**Rental yields** typically range from 3-5% gross in central Palma areas, with well-located or unique properties potentially achieving higher returns. Properties in up-and-coming areas may offer better yield potential as these neighborhoods develop.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

It's something we develop in our Spain property pack.

Sources

1. Balearic Properties Mallorca
2. Mallorca Top Immobilien Market Trends
3. Investropa Real Estate Forecasts
4. AProperties New Developments
5. Majorca Daily Bulletin Housing Prices
6. Lifestyle Properties Mallorca Trends
7. Balearic Properties Buyers Guide
8. Eco-N-Tech Renting vs Buying
9. Investropa Palma Property Analysis
10. Complete Buying Guide Mallorca