Buying and Renting in Mallorca: Why Prices Are Pushing Locals to the Edge — and What Could Help Now

How much of the island is left for those who work here?

In the market in Santa Catalina, between orange stalls and the constant murmur of voices, the same sentence is heard more often: "We don't stand a chance." The chime of bells, motorcycle noise and the clacking of fruit crates form the backdrop. The figures from the real estate association API give the feeling a name: purchase prices rose year-on-year by 10.5 percent. On average you now pay around €3,797 per square meter, in Palma even about €4,907/m². The key question is clear: How are teachers, bus drivers and shop assistants supposed to stay on Mallorca when housing becomes unaffordable?

Between a breather and alarm

There is no calming trend to celebrate when it comes to rents either. On average, rents in the Balearics are around €20.20 per square meter per month. Study leaders speak of a possible short breather because many households have reached their pain threshold. But that is at best a flash in the pan. For buyers the time window shifts: those who want to stay need patience, larger savings or simply luck today.

Buying behavior is visibly changing. The market favours compact flats: almost half of sales concern properties under 80 square meters. Townhouses and single-family homes, the pandemic evergreen, are scarce again. On walks through neighbourhoods such as El Terreno or es Jonquet you see more scaffolding and the soundscape of craftsmen renovating old buildings than the construction of new villas. This is not a coincidence but the result of a market seeking returns and quick sales.

More permits, but long construction chains

A glimmer of hope: more apartments are being approved than started and more are started than completed. That sounds positive at first: more supply could ease price pressure. But between plan and handover lie months, often years. Material shortages, labour shortages, rising interest rates and bureaucratic brakes can slow down construction sites. If permits are not implemented quickly, their effect is lost.

And another question that is rarely asked out loud: For whom are these approved apartments being built? Developers respond to demand with small, high-yield units — exactly those wanted by singles or investor-owners. Family-friendly housing is often lacking. That shifts the social structure of entire neighbourhoods.

What politics often overlooks

The public debate revolves around figures and emergency aid. Less attention is paid to how local rules and taxes shape supply. Vacancy charges, stricter controls on short-term rentals or tax incentives for long-term rentals could encourage owners to rent to locals. Equally important: faster procedures for converting tourist accommodation to long-term housing — a lever that often remains on paper.

Another neglected point is the qualification of craftsmen and the logistics. When skilled workers are lacking, renovations and completions are delayed. A targeted training initiative for construction and finishing trades on the island would be a multi-year but effective contribution.

Concrete proposals — short, specific, feasible

- Targeted subsidies: social housing for key professions (teachers, care staff, police) with clear allocation rules.
- Tax incentives: reduced property tax for landlords who rent long-term to locals.
- Stricter regulation of short-term rentals: higher penalties, but also incentives to convert to long-term rentals.
- Vacancy tax: already a signal against speculative vacancies.
- Reducing bureaucracy: priority permits for projects with affordable housing and family-friendly floor plans.
- Training initiative: support programmes for construction and trade occupations to reduce delays on building sites.
- Rent subsidies instead of blanket pension increases: more targeted to effectively relieve households.

No single remedy will be enough on its own. But combined, these steps could slowly close the gap between market prices and everyday incomes on Mallorca.

A face behind the numbers

On the phone a teacher from Palma told me about her flat search: "If prices continue like this, we will be the old people who can no longer live here." Her voice was quiet but resolute. You hear such voices everywhere: at the bus stop, in the supermarket, at the food stall on the Paseo Marítimo. Numbers reflect reality. People live it.

The island can still reinvent itself — or watch its own neighbourhoods fall apart. That is the challenge we must tackle now; not only with debates, but with concrete, locally appropriate measures. Otherwise market stories will soon be nothing more than postcard motifs for visitors.