Almost every second property in the Balearic Islands in foreign hands – what does this mean for Mallorca?

Almost every second property in the Balearic Islands in foreign hands – what does this mean for Mallorca?

When you stroll through Palma’s old town on a mild morning, with the scent of freshly brewed café con leche in the air and the clinking of cups from cafés along the Passeig, one thing becomes noticeable: more and more windows, doors and signs point to international buyers. The notary chamber states it plainly – in 2024 almost 42 percent of all property purchases were by buyers from abroad. That raises questions: Is this a blessing, a curse or both?

The numbers, briefly explained

The breakdown is remarkable: roughly 26 percent were non-residents, i.e. people who do not live permanently on the islands; another about 15 percent were foreigners resident in the archipelago. In practice this means: almost every second sale now bears an international signature.

You can feel it in everyday life. In Port d'Andratx the sea air smells of pine and diesel, and at the same time you see renovated villas with new façades and freshly landscaped gardens. In places like Andratx, Calvià or Valldemossa it quickly becomes clear: demand shifts prices. Up to August 2025 the average price was around €3,811 per square meter – roughly €1,650 above the Spanish average. In popular municipalities the peaks are often well above that.

What are the local consequences?

The short-term effects are visible: craftsmen work overtime, local construction companies are busy, furniture stores and garden centers benefit. But the flip side is hard to miss: young families report that small, affordable apartments are becoming rarer. Renters feel rising prices, and some traditional neighborhoods are turning into seasonal residential areas where windows remain closed in winter.

Less discussed is how much this development changes municipal structures: schools with fluctuating class sizes, a changed demand for health and social services, and a different profile for fees and tax revenues. International buying often brings immediate purchasing power, but not automatically long-term taxpayers for the municipality.

What matters now?

The central question is: How can Mallorca benefit from demand without losing its social fabric? The answer is not in simple bans but in a bundle of measures. Some levers that are already being discussed — and deserve more attention:

1. Enforce regulation of holiday rentals consistently. Many municipalities are working on stricter controls. Comprehensive registration and regular checks could reduce the supply of pure holiday apartments and relieve pressure on the rental market.

2. Incentives for long-term rentals and occupancy requirements. Tax breaks for landlords who rent long-term to locals, or mandatory quotas for local housing in new construction projects.

3. Promote communal housing models. Cooperatives, community land trusts or cooperative building projects could create affordable housing without sprawling over the landscape.

4. Use vacant stock. Actively reactivate existing, often long-empty properties – for example through reclassification and grants for buildings in need of renovation.

5. Transparency and local data basis. Better data on actual use (empty, permanently occupied, holiday rental) help municipalities plan and control precisely.

A share of responsibility lies with everyone

If you shop at the Santa Catalina weekly markets you hear conversations about life on the island in many languages. That is enriching. At the same time the challenge is real: when a neighborhood only works seasonally, the island loses an intangible good – the everyday life in which children walk to school, neighbors know each other and shops have regular customers.

The Balearic Islands are in demand like never before. The task is to steer growth so that the islands not only benefit in the short term, but remain livable and vibrant in the long term. That requires courage from municipalities, firmness in enforcing rules – and a bit of tact if you want to enjoy the smell of coffee and the sea every morning again.

Note: All figures refer to publications of the notary chamber and market observations up to August 2025.