Buying and Renting on Mallorca: Prices Continue to Rise – What It Means for Local Residents

Price increases that nobody can really celebrate

In the afternoon at the market in Santa Catalina, between orange stalls and the usual chatter, you hear the same lines: 'We have no chance' or 'For us, it's too expensive.' The current numbers from the real estate association API confirm what many already felt: purchase prices have risen by 10.5 percent year over year. On average, people now pay around 3,797 euros per square meter. In Palma, the value even climbed to about 4,907 euros/m².

Rentals: Short-term relief, long-term worry

Rentals are no consolation either: on average they are around 20.20 euros per square meter per month in the Balearic Islands. The study lead expects a brief breather in rental growth—the limit of what people can pay is moving closer—yet that only offers limited relief. For buyers, the situation looks gloomier: those who want to stay here now need patience, reserves, or luck.

What stands out: the market favors compact apartments. Almost half of the sold properties are under 80 square meters. Townhouses and single-family homes that were in demand during the pandemic now account for only a small share. On walks through neighborhoods like El Terreno or Es Jonquet you encounter more renovation work on small older apartments than on new villa projects.

Construction activity and hope

A bright spot: more apartments are approved than started, and more started than finished. That means in the coming months there could actually be new supply on the market — provided the construction sites run without delays. More supply is practically the only realistic brake on the price spiral.

For many families, however, the perspective does not change quickly enough. Beyond the numbers, there are people who weigh every month whether to pay rent, groceries, or the bus fare. Politicians discuss options; there are proposals for more subsidized housing and controls against abusive upfront payments. Whether that will be enough remains to be seen.

I know a teacher in Palma who has been looking for an apartment for years. She says on the phone: 'If prices keep going like this, we will be the old ones who can no longer live here.' That is hard, but honest. And it feels like a challenge that affects the entire island.