Owners of apartments in Palma's old town are receiving offers of up to 7,500 euros per month rental by estate agencies and foreigners. The preference is for apartments of around 80 square metres with two rooms in streets such as Jaume III and Born and in the whole of the La Llotja and Cathedral areas. If there is a lift and a terrace, then so much the better. Demand from the principal tourism markets for this type of accommodation in the city centre is very high.
Agencies typically take 20% commissions for apartments they offer. The highest rents can be demanded between July and September, but agencies are offering apartments all year round. The typical rental periods are from a few days to a fortnight. Much of this accommodation is subsequently advertised on "collaborative" websites such as Airbnb.
Foreign demand has increased because of improvements to the city's restaurants, to its cultural attractiveness and to general infrastructure. The foreign tourist seeking rented accommodation is typically characterised as being one with high spending power who wants an alternative to staying in a hotel. The price per day is no less than 250 euros, thus suggesting that apartments are being offered to a high standard.
The tenancy act, Ley de Arrendamientos Urbanos, allows short-term rentals, but apartments cannot be offered as "holiday" or "tourist" lets under this act. Nor can services be given. A contract is meant to be signed by both parties, indicating that there is a tenancy under the act.
The regional government wants Madrid to reform the act so that there is a minimum rental of one month and that such accommodation is classified as being tourist (as it isn't, there can be no tourist tax applied).