Each year Engel & Völkers publishes a market report which includes both official housing market data together with Engel & Völkers own data to provide a transparent and objective overview on the real estate sector.  This year, for the first time, the Engel & Völkers market report focuses on the entire Balearic region where the real estate and construction sector is an important economic driver accounting for around 23% of the gross domestic product of the Balearics (source:  Balearic Islands Statistics Institute - IBESTAT).

In a world marked by uncertainty, the stability of the Balearic property market is regarded as a major asset where sales activity in 2024 remained steady, reporting over 15,500 sales throughout the region (source: Notaries) marking a slight increase over 2023 of 0.6%.

Prices have held firm reflecting the stability and solid long-term returns of real estate in the region, providing a total return of 85% over the last decade (source: Land Registrars).

For Engel & Völkers Balearics, which has been established in the region for 35 years with 23 property shops and one commercial shop, unit sales increased by 18% over 2023 reaching 495 transactions. The E&V Balearic Group sales transaction volume reached 838 million euros in 2024 increasing by 14% over 2023, representing a 13% market share of the total sales transaction volume of the residential Balearic market in 2024 and a 23% share of the total sales transaction volume by foreign buyers in the region.

Price development

Last year saw the strongest price growth in the Balearics in a decade. According to Notaries, the average sale price per square metre increased by 15% over the year.  In 2024 the average price of property sold by Engel & Völkers in the Balearics was 1.7 million euros, down 4% YOY from 1.76 million euros the previous year which was primarily due to fewer ultra-high sales in 2023.

In the Balearic capital, the Land Registry data in 2024 indicated that house prices in Palma have risen by 32% since 2020, averaging 8% annual growth. Engel & Völkers' data confirms similar growth in the upmarket foreign buyer segment, with investors achieving an average annual return of 8% over the past decade.

Global shift in wealth impacts the Balearics premium real estate segment

Last year, 50% of all property sold by Engel & Völkers in the Balearics was valued at under 1 million euros.  However, since 2021 Engel & Völkers has seen a notable increased demand in the premium segment of the region's real estate sector, this coincides with a global shift in wealth and residency around the world. 

For example, in Mallorca 44% of all property sold by Engel & Völkers last year was valued between 1 - 5 million euros, and 7% had a value of 5 million euros and above. The primary hotspots for premium property in Mallorca include the southwest, the exclusive gated residential area of Son Vida, and increasingly in private rural locations around areas such as Santa Maria, Santanyi in the southeast, and Pollensa/Formentor in the north.

In Ibiza, premium property is concentrated in the surrounding areas of Ibiza Town in the marina areas or overlooking Talamanca Bay where according to Engel & Völkers average asking prices for villas range from 1.2 - 5.5 million euros, and in the south of the island around Cala Jondal in the sought-after residential area of Vista Alegre where average asking prices for villas range from 2.2 - 5.5 million euros depending on location and facilities. 

Large seaside villas in Menorca in areas such as Alcaufar, Binibeca, and the Port of Mahón fetch top prices on the island. For example, Engel & Völkers quotes average asking prices for a villa in the Mahón area range from 850,000 - 1.850 million euros.  In Ciutadella and the surrounding area, which accounts for approximately 35% market share of the island's residential real estate market, average listing prices for villas range from 800,000 - 2.5 million euros.

New Homes Supply

In 2024, housing starts (measured by planning applications) reached their highest level in a decade with a total of 3,649 housing starts recorded (source: IBESTAT) representing an annual increase of 12%.  According to the Balearic College of Architects, construction of affordable multi-family homes increased by 18% in the region in 2024. 

Who's Buying in the Balearics?

The total market share of foreign buyers* in the Balearics edged up slightly to 33% in 2024 (source: *Land Registrars). Last year there were minimal shifts in the distribution of key buyer segments; local buyers, where 67% market share was attributed to Spanish buyers*, foreign residents (expats), and foreign non-residents purchasing second homes.

Engel & Völkers recorded sales to buyers from over 20 countries in 2024 with German buyers accounting for 59% of the group's foreign sales, followed by British buyers with 12%, and Swiss and Swedish buyers, each representing 5%. Notably, buyers from the USA are beginning to enter the market, capturing 1% of the total market share.  For Engel & Völkers, the percentage of Spanish buyers varies on each island from 32% in Menorca, where they are the principal buyers, to 16% in Ibiza, and 9% in Mallorca.

Tendencies

Traditional Mediterranean architecture in demand

The natural environment of each island attracts top Spanish and international architects providing an eclectic range of design concepts and residences from spectacular glass-fronted contemporary seafront villas to traditional Mediterranean design which is increasingly in demand by clients with a return to the use of natural materials and the incorporation of sustainable technology.

More families settling permanently

Recently the demand for long-term rentals, especially in Mallorca, has increased. According to Engel & Völkers Mallorca the number of signed long-term rental contracts (of one year minimum) have risen over the past five years from 25% up to 40% in some areas of the island outside of the capital. In Palma, Engel & Völkers has signed 60% more long-term rental contracts over the same period. This trend is primarily due to people sampling island life before they buy with families also renting on the island and enrolling their children in one of the 19 international colleges in Mallorca. 

Comments Florian Hofer, Managing Director, Engel & Völkers Balearics: “As the leading estate agency in the Balearics with a 13% market share of the total sales transaction volume in the region, and a 23% share of the foreign buyer sales transaction volume, Engel & Völkers' data offers a particularly relevant gauge of trends in this part of the market. While our strong brand and reputation have helped us outperform the broader market, our sales figures also point to solid growth in the international upmarket segment and early indicators point to the market's continued stability and steady price development throughout 2025".

Read the latest Engel & Völkers Balearics Market Report 2024/25: https://issuu.com/engelvoelkersmallorca/docs/engel_v_lkers_market_report_balearic_islands_2?fr=sYTBmYTgzOTYyNjc