Mallorca Real Estate Market Analysis in 2024

Introduction
What is the price per square meter in Mallorca in 2024?
Total number of real estate transactions in 2024
Behavior of property owners
Factors influencing real estate prices in Mallorca
Real Estate Prices in Mallorca Are Rising the Fastest in Spain
Current Real Estate Prices in Mallorca by Location
How the Inflation Situation in Europe Affects the Mallorca Real Estate Market
What is Happening with Housing Prices in Mallorca? Real Estate Price Forecast
What Type of Real Estate is in Demand and Why
Real Estate Price Forecast for 2024-2025
Who is Buying Real Estate in Mallorca?
What Type of Property Was Bought in Mallorca in 2023
What is Happening in Mallorca's Secondary Housing Market
What is Happening in Mallorca's New Housing Market
Rental Prices in Mallorca – What’s Happening in the Market
Where Are the Most Reliable Investments in Mallorca?
How Expensive is Real Estate in Mallorca?
Why Yes! Mallorca Property?

Introduction

The real estate market in Mallorca in 2024 continues to show significant changes, reflecting the global economic situation and internal trends. In this article, we will take an in-depth look at the state of the market, price dynamics, factors influencing the market, and make forecasts for the coming years. The analysis is based on data from the first six months of 2024, provided by the National Institute of Statistics of Spain and Yes! Mallorca Property.

What is the price per square meter in Mallorca in 2024?

The average price per square meter of real estate in Mallorca continues to rise. As of the first eight months of 2024, the average price has increased by 11%—from €4,063/m² to €4,512/m². In comparison, in 2023, the price growth during the same period was 9.4%, with prices rising from €3,643/m² to €3,987/m².
This growth is driven by several factors, including increased demand from foreign buyers, limited market supply, and the high investment attractiveness of the island.

Total number of real estate transactions in 2024

In the first six months of 2024, 6,566 real estate transactions were recorded in the Balearic Islands, which is 14.46% fewer compared to the same period in 2023 (7,676 transactions). The largest decline occurred in March (-38.97%), linked to economic instability and rising mortgage interest rates. The table below shows the monthly data:

Month	2023	2024	Deviation
January	1,347	1,203	-10.69%
February	1,224	1,098	-10.29%
March	1,419	866	-38.97%
April	1,003	1,216	+21.24%
May	1,401	1,126	-19.63%
June	1,282	1,057	-17.55%
Total	7,676	6,566	-14.46%

Despite the decline in the number of transactions, April 2024 showed increased market activity (+21.24%), which may be related to renewed interest in real estate after the winter period.

Behavior of property owners

In 2024, starting from March-April, Yes! Mallorca Property began to record an increase in requests from property owners to lower the prices of their properties. According to the company, about 15-17% of the properties on the website were listed at reduced prices, indicating an adjustment of owner expectations due to the current market situation.

This is linked to the realization by owners that demand is no longer as high as during the post-COVID period, when people were actively purchasing real estate using the funds accumulated during the pandemic.

Factors influencing real estate prices in Mallorca

Key factors driving the growth of real estate prices in Mallorca include:

• Economic instability in Europe, which has led to increased mortgage interest rates and higher loan servicing costs.
• Limited supply: Mallorca has very strict urban planning regulations, which restrict the construction of new properties and contribute to rising prices for existing properties.
• High demand from foreign buyers, particularly from Germany, the UK, and Scandinavian countries. Mallorca has long been a popular place for real estate investments, consistently keeping prices at a high level.
• The energy crisis and rising flight costs have made purchasing property on the island even more attractive for those seeking stable assets.
• Increase in flight costs: The rise in airfare prices, caused by the energy crisis, has negatively impacted the flow of foreign buyers.
• Global instability: Political and economic uncertainty in the world is also putting pressure on the market.
• The crisis in Eastern Europe: This factor is reducing the number of foreign investors, especially from Europe.
• Decline in post-COVID demand: In 2023, the market experienced increased demand due to accumulated funds and minimal mortgage rates; however, by 2024, this effect has disappeared

Real Estate Prices in Mallorca Are Rising the Fastest in Spain

According to data from the National Institute of Statistics, the increase in real estate prices in Mallorca in 2024 significantly outpaces the average figures across Spain. While price growth on the mainland ranges between 5-7%, in the Balearic Islands, the average growth has reached 11%. This is not only due to limited supply but also the unique natural appeal of Mallorca.

Current Real Estate Prices in Mallorca by Location

• Real estate prices in Mallorca vary significantly depending on the location of the property:
• Palma de Mallorca (the capital): average price – €4,272/m².
• Southwest region (Calvià, Andratx): luxury properties – €6,000-8,000/m².
• Eastern coast (Artà, Cala Ratjada): €3,240/m².
• Central island (Inca, Manacor): €2,400/m².
• Southwest Mallorca: €6,900/m².
• Southern Mallorca: €4,360/m².

Real estate prices are particularly high in coastal areas and cities with good transport accessibility. Properties with sea views or proximity to beaches are traditionally priced higher.

How the Inflation Situation in Europe Affects the Mallorca Real Estate Market

Inflation and economic instability in Europe have greatly impacted the Mallorca real estate market. The rise in mortgage interest rates makes buying property more expensive for many buyers, especially those planning to use borrowed funds. This is one of the main reasons for the decrease in the number of transactions in 2024. However, thanks to Mallorca's attractiveness as an investment destination, demand remains high, allowing real estate prices to continue growing.

What is Happening with Housing Prices in Mallorca? Real Estate Price Forecast

According to Yes! Mallorca Property, current trends indicate that the Mallorca real estate market will continue to show price growth through the end of 2024. The average growth is expected to be between 8% and 12% by the end of the year. The main factors supporting this growth include limited supply and steady demand from foreign investors. Additionally, Mallorca's status as an elite Mediterranean resort continues to attract wealthy and famous individuals from around the world.

What Type of Real Estate is in Demand and Why

The most in-demand properties in Mallorca include:

• Luxury villas and houses in coastal areas with sea views.
• Apartments in Palma, especially in the historic part of the city and areas with developed infrastructure.
• Apartments in exclusive gated communities, particularly those located directly by the sea or near golf courses

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Read more about golf properties in our detailed review: Golf properties for sale in Mallorca - things to know 

• Country houses (fincas) in the central part of the island, attracting buyers seeking seclusion and tranquility. This type of property is especially popular among buyers from Central Europe.

These properties are in demand due to the island's unique natural beauty, developed infrastructure, and accessibility to international flights.

Real Estate Price Forecast for 2024-2025

Based on current data, it is expected that the Mallorca real estate market will continue to show steady price growth over the next two years, although the pace may slow down. In 2025, price growth is predicted to be around 6-9%, reflecting the exhaustion of the post-COVID effect and the stabilization of the economic situation in Europe.

Who is Buying Real Estate in Mallorca?

Foreign buyers remain the main purchasers of real estate in Mallorca. The most active buyers come from:

• Germany
• United Kingdom
• Scandinavian countries
• France
• The Netherlands
• Austria
• Switzerland

These buyers value Mallorca for its stable climate, developed infrastructure, and high quality of life.

What Type of Property Was Bought in Mallorca in 2023

In 2023, the most popular properties were luxury villas in the southwest of the island and apartments in the center of Palma. This is due to the high investment attractiveness of these properties and their stable prices, even against the backdrop of global economic instability.

What is Happening in Mallorca's Secondary Housing Market

The secondary market in Mallorca in 2024 is undergoing a correction. Many property owners, realizing the decrease in demand, have begun to reduce prices on their properties. According to Yes! Mallorca Property, about 15-17% of properties on the secondary market were listed at reduced prices in the first half of 2024.

However, it should be noted that the price reduction in Mallorca’s secondary real estate market is not widespread, and lowering the price does not guarantee a low-cost property in Mallorca.

Additionally, some owners are choosing to withdraw their properties from the market. They prefer to earn from renting their properties or are hoping for further price increases to sell their homes at a higher value in the future.

What is Happening in Mallorca's New Housing Market

The new housing market in Mallorca remains stable, although the pace of new construction has slowed. Limited land for development and strict urban planning regulations do not allow for a significant increase in the supply of new properties, which supports high prices for new builds.

To take a closer look at the prices for new developments in Mallorca, visit our new build catalog: New Build Property in Mallorca for Sale

Rental Prices in Mallorca – What’s Happening in the Market

The rental market in Mallorca is also showing price growth. In 2024, the average rent increased by 13% compared to the previous year. The average cost of renting property in Mallorca rose from €16.1/m² to €18.5/m². The main demand is for long-term rentals of luxury properties in tourist areas and apartments in Palma.

Where Are the Most Reliable Investments in Mallorca?

The most stable and profitable investments in Mallorca remain:

• Luxury real estate in the southwest.
• Apartments in Palma.
• Country houses (fincas) in the central regions of the island.

These properties continue to be in demand even during periods of economic instability and provide owners with high returns from renting or subsequent resale.

How Expensive is Real Estate in Mallorca?

Mallorca has traditionally been considered an expensive destination for buying real estate. In 2024, the average price per square meter is €4,512/m², significantly exceeding the average prices across Spain. However, for this price, buyers receive a unique product—real estate on the island of Mallorca. When you decide to purchase property in Mallorca, it becomes your ideal investment in a stable future not only for yourself but also for your heirs.

When choosing real estate in Mallorca, it is important to seek help from professionals, and Yes! Mallorca Property is here to assist you.

Why Yes! Mallorca Property?

With more than 20 years of experience, a rich catalog of over 1,000 properties, exclusive offers for clients, and the high professionalism and expertise of our specialists, we are your reliable real estate agent in Mallorca.

Our clients highly appreciate our work, as evidenced by our Google review rating of 4.8.

Explore the property catalog of Yes! Mallorca Property for sale in Mallorca

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