The property market in Mallorca continues to attract strong interest.  As we enter mid-2025, the island’s property market continues to reflect broader economic shifts in Europe, changing buyer demographics, and evolving preferences shaped by post-pandemic lifestyles. Whether you’re considering purchasing a holiday home, relocating permanently, or seeking a strong investment opportunity, understanding current trends is essential.  Here we talk about the top 5 trends for the current property market in Mallorca.

Sustained Demand from European Buyers.

Long popular with buyers from Germany, the UK, Scandinavia, foreign investment remains a key driver in Mallorca’s property market.

The island’s high quality of life, safety, and favorable climate make it a perennial favorite for second homes and long-term relocations.

Building restrictions, particularly within coastal and rural areas have historically limited overdevelopment, preserving its natural beauty but also creating a bottleneck in new housing stock.

This scarcity has helped support property values, even during economic fluctuations.

Rising Interest from North American Buyers. 

A noticeable trend in 2025 is the uptick in interest from North American buyers who are continuing to fuel demand, especially in prime coastal areas and rural luxury estates.  A strong U.S. dollar,  increased remote working flexibility and direct flights from New York, means more Americans and Candadians are exploring Europe for lifestyle investments.

Mallorca’s climate, connectivity, and international schools make it an attractive base for remote professionals and those with young families.

Overall property prices in Mallorca have increased moderately in early 2025, but the rise is particularly notable in high-demand areas like Palma’s Old Town, Port Andratx, Soller & Deià and Pollença. Properties in these zones are seeing annual price increases of 5–8%, driven by low supply and high competition.

In contrast, inland villages such as Felanitx and Porreres offer better value and slightly slower price growth, making them attractive for budget-conscious buyers or long-term investors seeking future appreciation. 

Shift Toward Sustainable and Energy Efficient Homes. 

Sustainability is increasingly important to buyers in 2025. Eco-conscious architecture, solar energy systems, and energy-efficient design are no longer niche features—they’re often expected, particularly in high-end developments.

Buyers are prioritizing properties that meet EU energy regulations and are looking for homes with A or B energy ratings.

Developers are responding with smart homes that integrate automation, solar panels, and water recycling systems. In rural areas, self-sufficient fincas are gaining popularity, especially among Northern European buyers seeking a greener lifestyle.

Pricing: Stability with Pockets of Growth. 

While global inflation and interest rate hikes have cooled some European property markets, Mallorca has proven relatively resilient.

Prime properties, especially those with sea views, proximity to beaches, or historical significance have held or increased their value. However, the mid-tier segment is experiencing a slight price adjustment as financing costs rise but also for many, due to the property being over priced initially. 

Average property prices in Palma have risen by around 3–5% year-on-year, while ultra-luxury homes in the southwest and north coast continue to see double-digit increases, driven by cash buyers.

Local authorities are maintaining tight control over building permits to protect the island’s natural beauty and has led to a seller’s market in many parts of the island.

Tourism Recovery Boosting Luxury Rentals and Investment Yields. 

Tourism rebounded strongly post-pandemic, and in 2025, the demand for short-term luxury rentals remains high.

Investors are seeing strong returns from villa rentals, particularly in areas like Pollença, Sóller, and the Tramuntana mountains. 

Rental licenses are limited and heavily controlled by local municipalities.  

Properties with existing or transferable tourist licenses are in high demand and can command a significant price premium due to the moratorium on issuing new ETV licences that remains in place across the island, meaning no further licences will be granted for the foreseable future. 

Looking Ahead: What to Expect in Late 2025.

Mallorca’s real estate market is expected to remain strong throughout 2025.

Interest rates in the eurozone appear to be stabilising, which could maintain borrowing affordability for many buyers.  However, any upward rate adjustments could cool the market slightly in late 2025 or 2026.

Smart investors are advised to act sooner rather than later, especially if targeting prime areas or properties with rental potential.

The combination of limited inventory, strong foreign demand, and the island’s enduring appeal makes Mallorca one of the most resilient property markets in the Mediterranean.