Mallorca is booming.
Visitor numbers are at an all-time high and the property market has shown a stable 1.7 per cent annual rise – soaring to 13 per cent for the luxury property sector.
These are the findings of a market study by the Steinbeis Transfer Institute Centre for Real Estate Studies in collaboration with Porta Mallorquina Real Estate.
It claims that the most expensive region continues to be the south-west, closely followed by the increasingly popular Palma city.
Since a similar study in 2015, the average price across the island has risen by 55 per cent and in Palma City by as much as 78 per cent.
The inflation rate in the eurozone was 23 per cent in the same period.
The report authors say this discrepancy underlines Mallorca’s continued reputation as an attractive region for property investment.
Study director Professor Marco Wölfle from the Center for Real Estate Studies says: “The positive correlation between tourism intensity and property demand remains intact. Mallorca’s attractive macro-location – with the beauty of the island, its mild climate and high quality of life – makes the Balearic island a stable and lucrative property market.”
Compared to the previous year, 11.5 per cent fewer properties are on offer.
Properties at the upper and lower end of the price range appear to be particularly popular with buyers, but luxury properties account for just four per cent of the island-wide supply.
Porta Mallorquina franchise partner Timo Weibel comments: “The fact that prices are calming down somewhat after the double-digit increase in 2022 is positive for everyone and speaks against the formation of a bubble. But anyone waiting for prices to fall significantly, as in Germany, will be disappointed.”
The south-west remains the most expensive at 7,700 euros per square metre although Palma city is increasingly catching up at 7,300 euros per square metre.
The most affordable region remains the centre of the island with an average of 4,165 euros per square metre although prices are currently rising particularly sharply there.
Last year, the island-wide average price of a luxury property on Mallorca passed the 10,000 euro per square metre mark for the first time. Compared to the previous year the price rose from 9,650 euros to 10,900 euros. In the area around Palma, luxury properties cost an average of 9,850 euros per square metre, 10.5 per cent more than in the previous year.
In addition to the property market, the tourism sector in Mallorca and the Balearic Islands as a whole is unimpressed by the global challenges.
At 14.4 million, more visitors came to the Balearic Islands in 2023 than ever before. Compared to the previous year, the islands recorded an increase in visitors of 9.1 per cent and this positive development of tourism is sending a significant signal for the island’s property market.
A new visitor record is expected for 2024. The range of flights is to be expanded, including a new direct connection between Miami and Palma.
CRES therefore expects property prices to continue to rise in the low single-digit percentage range in the coming years.