Mallorca Market Update – Late Summer 2025 and what to expect this fall. Let’s discover the latest real estate trends in the Mallorca Property Market.
Mallorca’s housing market stays strong as foreign demand, limited supply, and strategic macro trends shape the coming fall season. During these spring and summer 2025 seasons, Mallorca’s property market has remained one of Spain’s top performers , outpacing national averages in both pricing and international demand.
While overall transaction volumes have recently cooled slightly, the value of properties being sold is rising, driven by competition at the premium end of the market and constrained supply across the island.
A Strong National Backdrop, but Mallorca Stands Apart
According to the Global Property Guide, Spain’s national housing market remained robust through early 2025, with house prices rising 11.16% year-on-year in Q1, following similarly strong growth in 2024. Quarter-on-quarter increases also held steady, reflecting consistent demand. Mortgage conditions have eased slightly, with rates averaging 3.05% in Q1 2025, improving affordability for well-qualified buyers.
While the national average price increase in Q4 2024 was around 7.05%, the Balearic Islands outpaced that with a regional increase of 8.6%, and even stronger results in key second-home markets.
Palma de Mallorca: A Market in High Demand
Nowhere is this trend more visible than in Palma, which has seen a surge in both interest and price. According to Investropa, Palma’s average property price rose from €4,860 to €5,429 per square meter between May 2024 and April 2025 – a +11.71% annual increase, one of the strongest across Spanish cities.
This places Palma as Spain’s fourth most expensive residential market, trailing only San Sebastián, Madrid, and Barcelona. Certain neighborhoods have seen even sharper gains:
- Genova-Bonanova-Sant Agustí: +18.1% year-over-year
- Portixol-Molinar: +15%, now averaging €6,433/m²
- Old Town: more stable at +3–5%, due to already elevated pricing
Luxury villas in areas like Son Vida, have realized much slower growth as compared to apartments. Outdoor space, terraces, and sea views are commanding notable premiums – often 20–30% above average values, especially in penthouses and modern apartments.
The Supply Side: A Luxury-Weighted Market
While price trends and buyer demand often dominate headlines, Mallorca’s supply landscape plays an equally important role — and it’s far from balanced. According to a 2025 supply analysis by Charlesdel, based on 14,000 listings from Kyero, the island’s inventory is heavily skewed toward the luxury end of the market.
Key insights from Charlesdel’s June 2025 supply analysis:
Villas in Mallorca:
- 59% of all homes for sale in Mallorca are priced above €1 million, with villas showing an even stronger luxury skew:
- 71% of villa listings exceed €1 million, and 30% are priced above €3 million.
- In contrast, the most common price band for villas is actually €500,000 to €1 million, proving that while ultra-luxury grabs attention, there’s still significant stock for mid- to upper-tier buyers.
- Only 13% of villas under €3 million are newly built, compared to 19% of villas priced above €3 million (Charlesdel, June 2025)
Apartments, by contrast, have a more accessible distribution:
- The most common range is €400,000–€500,000
- Nearly 50% of apartment listings fall under €700,000
- Only 16% exceed €1.5 million, confirming that the luxury skew is more concentrated in the villa market
New Build Trends: Luxury Driving Development
New construction is largely happening at the higher end of the market. Just 13% of villas under €3M are new builds, but 19% of those over €3M are newly built, according to Charlesdel’s June 2025 segmentation. These trends suggest the future supply will continue pushing upward in price.
In Andratx, one of the island’s most exclusive municipalities, the figures are even more striking:
- 86% of villas are priced above €1M
- Nearly 10% exceed €10M
- The area carries a 53–65% premium over the Balearic average, based on Idealista data (June 2025)
- 78% of new builds in Andratx are contemporary, showing developers are responding directly to modern buyer preferences
This supply structure explains why Palma and Mallorca remain expensive even outside of top-tier enclaves. It also highlights why price corrections are unlikely — supply remains tight, especially at mid-market price points.So while apartments offer a more accessible entry into the market, buyers seeking space, privacy, or long-term family use often find themselves facing a premium for villas — particularly modern or newly built ones.
Rental Market Strength & Lifestyle Appeal
Palma’s rental market has also seen sharp increases, with average rates hitting €17.2/m², a +11.9% YoY rise. This is supported by steady tourism, long-term relocations, and a growing community of remote workers drawn to Mallorca’s infrastructure, international schools, and year-round air access.
While short-term rental regulations and tourist license restrictions have limited investor activity in some zones, they’ve also contributed to higher long-term rental values and shifted focus toward lifestyle-driven, owner-occupied homes.
What to Expect Through Fall 2025
While August will remain active with late-season viewings and last-minute purchases, the early fall market (September–October) is expected to cool slightly, offering an opportunity for more negotiation. However, Palma’s limited land availability, tight new-build restrictions and rising development costs, the structural imbalance between demand and supply and the rising demand for year-round homes,suggest no major correction is on the horizon.
Most forecasts anticipate 5–7% annual price growth through 2030, anchored by strong fundamentals: limited supply, healthy mortgage lending, Palma’s evolving appeal to remote professionals, families, and lifestyle investors alike, and continued foreign investment (31.93% of Balearic buyers are international).
Takeaways for Buyers, Sellers & Investors
Buyers: August is the final stretch of high-season listings – early fall may offer more flexibility but fewer options. It’s wise to focus on value in fast-rising areas like Portixol or Bonanova.
Sellers: If your property includes outdoor space, sea views, or modern upgrades, demand remains strong, particularly among international buyers seeking turnkey homes.
Investors: Apartments remain the more accessible asset, with solid rental appeal. For capital appreciation, modern villas in premium neighborhoods continue to show the sharpest upward movement.
Final Word
Mallorca’s real estate market is not only resilient, but it’s structurally strong and premium. With more than half the inventory priced above €1 million and new builds entering only at the top, the island has become one of Europe’s most established lifestyle-driven luxury markets. In most European markets, luxury listings sit at the top 10%, while in Mallorca, they define the market structure. That dynamic, paired with steady foreign demand and strict planning restrictions, is a major reason why prices continue to climb. For serious buyers or long-term investors, late 2025 may still offer windows of opportunity, and the longer-term trend remains firmly upward.
