Factors such as international demand, digitalisation, economic stability and the sector's tourist appeal have led to sustained growth in Mallorca's real estate market over the last 10 years. As follows, we will analyse the market's performance in the coming years according to these variables.
Stable and increasing demand from the foreign market, especially the UK, Germany, Nordic countries and to a lesser extent the US.
Brexit initially caused some uncertainty, however, the property market is expected to continue to attract UK buyers looking for permanent residency or holidays.
The island is traditionally perceived as the ideal location for a second residence or a long term investment.
Thanks to digital platforms, buyers will be able to search for properties and view them in more detail from home through virtual tours, which will continue to facilitate the remote purchase of houses for sale in Mallorca.
At the same time, digital nomad, which has become a common practice in recent years, produces property searches in quieter areas of Mallorca. This could work to the advantage of rural or less urbanised areas, such as the interior, which have traditionally been more affordable.
Demand for luxury properties in Mallorca remains high with increasing interest in top of the range villas in exclusive areas. While it is true that the offer of quality properties remains limited, in some areas there has been an increase in construction. This shortage of properties is particularly significant on the coast, near beaches and in Palma.
Increased regulation of energy efficiency and sustainability is expected when building new homes for sale in Mallorca and this could have an impact on prices. As environmental concerns grow, buyers are increasingly interested in homes that comply with the concept of sustainability and demand for Certificate of Energy Efficiency (EEC) homes, green technologies and environmentally friendly building materials is increasing.
There is a considerable market to acquire properties for sale in Palma for renovation and on the coast
Properties with ample indoor and outdoor space are the most sought after and gardens, terraces and proximity to nature are a priority for many buyers, especially after the recent pandemic.
The government and developers are increasingly prioritising environmentally friendly projects, both in refurbishment of older buildings and new developments. The refurbishment of old and historically valuable properties will continue to be important, especially in the refurbishment of homes in Palma and other areas, which attracts both national and international buyers.
Along with the search for and adaptation to new urban trends and a more sustainable lifestyle, there are likely to be more mixed-use real estate projects, combining housing, commercial premises and workspace, and this concept could be attractive to buyers who favour a more integrated and modern lifestyle.
Prices are expected to increase, albeit more moderately than in past years, due to a shortage on offer and a growing demand. The island's economic stability, its international appeal and the growth of the luxury market are factors behind these trends.
Demand in less populated areas and the interior of the island could see an increase in demand as a result of central and coastal areas becoming less affordable for buyers.
It is expected that the Government will continue to implement laws to limit the number of properties for tourist rental, especially in urban areas such as Palma and coastal locations, with the subsequent detriment to both owners and investors. The latter will have to take into account the local regulations applicable to tourist rentals and the positive development of tourism when considering invest in Mallorca. However, long term rentals in Mallorca could become an attractive option and this would affect the demand for properties in certain areas.
Pollentia Properties, real estate in Mallorca, expects the property market to continue to attract strong international interest particularly in luxury properties and second homes.
Preference will be given to sustainability, digitalisation and the flexibility provided by remote working and although prices will continue to rise, a shortage of properties in sought-after areas could lead to opportunities in more outlying or rural areas.
Stability and adaptability will be the overriding characteristic of real estate in Mallorca in 2025, with an emphasis on achieving a higher quality of life and a connection with nature.
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