Almost four in ten purchases by foreigners – Who still owns Mallorca?

Almost four in ten purchases by foreigners – Who still owns Mallorca?

Key question: How long will housing on Mallorca remain affordable for people who work and live here if almost 37.2 percent of purchases come from foreign buyers and mortgage burdens are breaking records?

The raw numbers are harsh: In the third quarter of this year, 37.19 percent of all apartment and house purchases in the Balearic Islands were made by buyers from abroad, reports the Spanish land registry association, according to Almost every second property in the Balearic Islands in foreign hands – what does this mean for Mallorca? That is a marked jump compared with the previous quarter (+4.92 percentage points) and far above the Spanish average of 16.05 percent. At the same time, property prices in the Balearics rose to an average of 4,502 euros per square meter — an increase of 4.4 percent in the quarter and 9.1 percent since the start of the year. For Mallorca this means: an 80-square-meter apartment now comes to more than 360,000 euros.

Financial figures are taking their toll on spirits. The average monthly mortgage payment on the islands is 1,510.50 euros; households must therefore allocate about 62.1 percent of their income to loan repayments. By comparison: Spain's average is around 35.3 percent, and in Madrid it is 45.5 percent. The average mortgage in the Balearics is 283,227 euros — almost 100,000 euros more than the national average. For context, see Why so much property buying in Mallorca is paid in cash — and what that means for the island.

This combination of strong foreign demand and high prices makes housing effectively inaccessible for many locals. In Palma the price per square meter is about 4,408 euros — the city is one of the four most expensive provincial capitals in Spain. According to nationwide data, buyers are dominated by citizens from EU countries (54.72 percent), followed by buyers from the rest of Europe (17.76 percent); buyers from Africa, Asia and Latin America each account for roughly seven to nine percent. The report did not provide a regional nationality breakdown for the Balearics — a gap that calls for more transparency.

Critical analysis: Who benefits from the growth?

Foreign investment brings money into the market, but the supply is not distributed evenly: luxury flats and second homes drive up prices in the best locations, while affordable housing disappears. The real estate market reacts sensitively: rising prices fuel speculative demand. Banks grant larger loans, mortgages grow — this increases households' vulnerability to interest rate changes or income losses. When over 60 percent of household income goes to the mortgage, there is hardly any room left for other expenses and for savings. Nevertheless, some signs point to cooling demand, as noted in Fewer Foreign Buyers — Mallorca between Price Boom and a Breather.

Missing details in the public dataset also obscure where exactly the purchase pressure peaks: coastal towns, central Palma or new development areas? Without this granularity, targeted management is almost impossible. Public information is also scant on the influence of short-term holiday rentals, inheritances or company purchases in investor names — all factors that can reduce market supply. There are reports identifying local concentrations, for example The 60-percent villages: How foreign buyers are changing Mallorca's neighborhoods.

What is missing from the public debate

It is too rarely made explicit how much the quality of life for workers, teachers, care workers and tradespeople depends on housing costs. The debate often stays at buzzwords like "market" and "investment", instead of discussing concrete consequences for commuting distances, school attendance, shop closures or nightly noise problems in tourist neighborhoods. There is also no systematic breakdown of purchases by municipality and use (primary residence, second home, holiday rental, corporate purchase).

And: everyday life on the ground tells stories that do not appear in the numbers. At the market in Santa Catalina one hears sellers in the morning talk about rising rents; on the Passeig de Mallorca you see construction cranes and luxury facades while tradespeople in craftsmen's corners are looking for affordable apartments. These scenes show that the issue is not abstract — it touches neighborhoods, work and identity.

Concrete approaches

Criticism alone does not help. Proposals that could be implemented on Mallorca must be pragmatic and locally anchored:

1) More and better data: The Balearic administration should publish purchase statistics by municipality, type of use and buyer origin. Only with precise figures can targeted measures be planned.

2) Promote affordable housing: Municipalities could designate building land primarily for social and cooperative housing and introduce sale conditions for newly created housing (e.g. occupancy obligations for primary residences).

3) Tax targets instead of blanket bans: A graduated property transfer tax for non-residents or higher taxes on vacant apartments and intensive holiday rentals could dampen speculative demand.

4) Financial support for locals: Models such as shared-equity, low-interest local development loans or guarantee programs for employees in key professions would provide direct purchase assistance without completely distorting the market.

5) Rules for short-term rentals and transparency: Stricter registration requirements, enforcement of rental limits and linking with tax authorities reduce misuse and ensure fairness.

Conclusion — brief and clear

The land registry figures show: Mallorca remains attractive to foreign buyers, but that comes at a price for the people who live and work here. Without better data and targeted, locally adapted measures, the gap between market prices and incomes threatens to keep widening. Anyone who jogs from Plaça Cort to Portixol in the morning and sees the new villas on the coast already senses it: this is not just about euros per square meter, but about communities that are changing. Politics, administrations and the industry must act now — with transparency, precise instruments and a priority on housing for the island's residents.