Mallorca property prices prove resilient

Mallorca Property Prices by Segment

Mallorca is one of the most attractive real estate markets in the whole of Spain. Buyers can find a very wide variety of premium properties on the Balearic island: 49 percent of homes for sale on Mallorca in 2023 had asking prices in excess of 500,000 euros.

• 3 percent of properties were on the market for over 5 million euros

• 23 percent of properties had a price tag between 1 million and 5 million euros

• 23 percent of properties were on sale for between 500,000 and 1 million euros

• 51 percent of properties had asking prices below 500,000 euros

How are prices for high-end properties on Mallorca developing in specific terms?

Over the past decade, Engel & Völkers has registered an almost continuous rise in prices for such properties. The average price increase between 2013 and 2023 was approximately 74 percent. In 2023, the average sale price for properties brokered by Engel & Völkers rose by 14 percent over the previous year, from 1.64 million euros to 1.88 million euros.

What are the top 5 most exclusive residential areas on Mallorca?

• Southwest: Puerto de Andratx, Santa Ponsa, Portals Nous

The majority of properties in the top market segment are located in the southwest of the island. 40 percent of the homes for sale in this region had asking prices in excess of 5 million euros in 2023. Families are increasingly drawn to the southwest of the island all year round, in part due to the wide range of international schools.

• Palma and the surrounding region: Son Vida, Esporles, Puigpunyent

Buyers will also find a high density of high-end properties worth more than 5 million euros in the region around Palma, particularly in Son Vida. This residential area of Palma is surrounded by green hills away from the city center and offers an excellent infrastructure with golf courses and schools. It attracts affluent families and couples alike.

• Center of the island: Santa Maria, Alaró, Selva, Bunyola

The center of the island is especially popular with buyers drawn to authentic villages that still retain their old customs and traditions. The undulating countryside is home to large country houses built in a typical Mallorcan style, olive groves, vineyards and the finest wineries on the island.

• North: Pollensa, Puerto de Pollensa, Puerto de Alcúdia

Prospective property buyers will find traditional finca properties and modern villas in the north of the island. Places like Pollensa offer the perfect combination of impressive mountain scenery and proximity to the sea with idyllic bays and beaches nearby.

• Southeast: Santanyí, Portocolom, Cala Llombards

In the Santanyí region, the town of the same name is very popular, in addition to the coastline stretching from Portocolom to Cala d’Or and Cala Llombards. The region boasts many fishing ports and has retained its picturesque rural charm. Water sports enthusiasts will also be in their element here.

Where can you find attractive properties on Mallorca for less than 500,000 euros?

• Properties can be found in smaller towns and villages in the center of the island with a good price-performance ratio under 500,000 euros. There are, for instance, smaller, beautiful townhouses in places like Campos, Llucmajor, Porreres, Inca or Artà. Often they are older properties in need for partial or full renovation and refurbishment.

• Properties under 500,000 euros can also be found in Palma’s Old Town and the city’s immediate suburbs, as well as in the coastal towns of Porto Cristo, Puerto de Pollensa, Puerto de Alcudia, Can Picafort, Colònia de Sant Pere and Cala Ratjada. Buyers may have to make slight compromises here. There may not be an elevator, staircases may be narrow, or the balcony may be very small. These properties are also frequently in need of renovation. This, in turn, can be an advantage though for buyers looking to remodel and customize their new dream property to their own personal tastes.

• Demand for properties of this kind is very high. Whenever a listing like this is added to our property portfolio, interested parties and prospective buyers can be found very quickly.

What current trends are impacting the Mallorcan real estate market?

Trend 1: Tax breaks attracting more buyers

The Balearic Islands are becoming even more attractive for buyers of properties worth between 700,000 and 3 million euros. The burden of wealth tax in the Balearic Islands has been reduced, with effect from January 1, 2024. The tax-free threshold for wealth tax has been raised from 700,000 to 3 million euros per person. This means that only assets in excess of 3 million euros per person will now be taxed for Balearic tax residents and non-residents.

Trend 2: Energy efficiency and eco-farming

Many people looking for a property are increasingly influenced by their environmental consciousness, and are therefore seeking a home fitted with eco-technology to sustainably reduce both water and energy consumption. Properties with expansive outdoor land are also in strong demand, as they allow residents to grow their own produce such as fruit and vegetables, or to rear animals.

Trend 3: Living and working on Mallorca

Homeowners on the island no longer use their property exclusively during the holiday months of the year. Demand has risen significantly for properties that offer the option of a home office on Mallorca. Moreover, the number of people relocating their primary residence to the island continues to increase sharply. This is a trend that has continued since the pandemic. Mallorca also has a large number of international schools, enabling more and more younger people and families to move to the island on a permanent basis. Some of these new arrivals on the island permanently rent a property when they first relocate, with a view to purchasing their own property at a later date.

Interested in buying a property on Mallorca and want to find out about financing options?

Now operational in Spain too, Engel & Völkers Finance can help you select a mortgage loan and tailor the financing for your real estate project. Experienced financial advisors will guide you through the entire process with one of the partner banks. The aim is to find a fast financing solution that enables you to purchase your dream property.