by Torben Aagaard 
The real estate market in Mallorca is set for another transformative year in 2025. With rising property values, strong international interest, and new regulations shaping the landscape, understanding the key trends is crucial for anyone looking to buy, rent, or invest on the island.
At Homes in Mallorca, we are a community dedicated to helping people Live Their Mallorca Dream—whether that means purchasing a luxury villa, securing a long-term rental, or making a smart property investment.
If Mallorca is part of your future, staying informed is essential. Let’s explore the top trends shaping the real estate market in 2025 and how they might impact your property decisions.
1. Property Prices Continue to Rise
In 2024, the Balearic Islands saw a 19.08% increase in second-hand property prices, with an average of €4,931 per square meter. While the steep price hikes of recent years may slow slightly in 2025, experts still forecast an average increase of 5-7% across Mallorca.
Luxury areas such as Palma Old Town, Port d’Andratx, and Santa Ponsa are expected to see continued growth due to sustained demand from international buyers. Meanwhile, emerging hotspots like Santanyí and Alcúdia are attracting new interest as buyers look beyond traditional prime locations.
2. Strong Demand from International Buyers
Mallorca remains one of Europe’s most desirable real estate markets, attracting investors and lifestyle buyers from Germany, the UK, Scandinavia, and beyond. In 2023, foreign buyers accounted for 32% of property transactions, a trend that is expected to continue into 2025.
With its Mediterranean climate, excellent infrastructure, and a strong economy, Mallorca continues to appeal to expats, retirees, and remote workers looking for a high quality of life. The luxury segment, in particular, remains resilient, with high-end villas and seafront apartments retaining their value.
3. Changes in Rental Regulations Impact Investors
New short-term rental restrictions introduced in the Balearic Islands have led to an 8% drop in bookings and a 12% decrease in property listings over the past year. These regulations, aimed at balancing tourism with local housing needs, have made some investors rethink their rental strategies.
Many property owners are now shifting toward long-term rentals, which provide a more stable income stream while complying with the latest regulations. This shift is particularly relevant for buyers considering rental income as part of their investment strategy.
4. Emerging Hotspots Beyond Palma
While Palma remains the heart of Mallorca’s real estate market, new areas are becoming increasingly attractive to buyers. Some of the key locations to watch in 2025 include:
- Santanyí – A charming town gaining popularity for its traditional architecture and scenic surroundings.
- Alcúdia – A hotspot for families and investors looking for properties with strong rental potential.
- Sóller & Deià – Ideal for buyers seeking an authentic Mallorcan lifestyle with stunning mountain and sea views.
These areas offer great opportunities for those looking to invest in Mallorca while enjoying a more relaxed atmosphere away from the main tourist hubs.
5. Sustainability & Smart Homes on the Rise
Sustainability is a growing priority in Mallorca’s real estate sector. More buyers and developers are seeking eco-friendly homes, featuring:
- Solar energy solutions
- Smart home technology
- Sustainable building materials
Modern buyers are not just looking for a home—they want an energy-efficient property that aligns with their values. Expect to see more green-certified homes and eco-conscious developments gaining traction in 2025.
Thinking About Buying or Renting in Mallorca?
If you’re considering buying, renting, or investing in Mallorca, staying informed is key.
At Homes in Mallorca, we provide expert insights, community discussions, and property listings tailored to help you Live Your Mallorca Dream.
For an in-depth guide to Mallorca’s real estate market in 2025, we highly recommend report FOCUS ON PALMA DE MALLORCA (2025). It offers valuable insights into pricing trends, investment strategies, and the best areas to buy.
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