The Joint Committee (Congress and Senate) on Insularity will on Tuesday debate and vote an initiative to establish a regulatory framework to limit, regulate or condition the purchase of property by non-residents in the Balearic and Canary Islands. This is a non-binding initiative to take a position on establishing a legal regime to regulate the purchase of homes by foreigners in the two regions.
In the initiative, to which Europa Press has had access, there are proposals for complementary measures to promote affordable housing, the renovation of the housing stock and priority access for residents of both regions. In the specific case of the Canary Islands, they are seeking express authorisation from the European institutions for restrictions on the purchase of homes by foreigners ‘given their status as an outermost region and the threat posed by foreign real estate pressure to their social, economic and environmental balance’.
In the Balearics, they are considering the possibility of negotiating with the European Union to extend this restriction, ‘given the similarities between their situation and that of an outermost region such as the Canary Islands’.
The motion criticises the the massive acquisition of houses by non-residents claiming it ‘is generating unprecedented pressure on the housing market in the Balearic and Canary Islands, especially in areas with the highest incidence of tourist activity. This situation is causing a profound distortion in prices, progressively expelling the local population from access to decent housing, while eroding the social, economic and cultural fabric of the islands.’
Mallorca, for example, has strengthened its position in the international luxury property market, ranking second in Spain for premium real estate listings valued at over €2.5 million. The island accounts for 27% of the nation's high-end property supply, as highlighted in a recent report by Lucas Fox, a key player in the prime residential sector. Its picturesque landscapes and excellent quality of life have made Mallorca a top choice for luxury property buyers, trailing only behind Malaga, which leads with 30% of the market.
The luxury property market now represents 18% of the total property supply in Mallorca, with rising demand seen in the scenic Serra de Tramuntana region. This area, known for its charming villages such as Deya, Valldemossa, and Soller, has become increasingly popular for its Mallorcan-style villas with stunning views.
When considering Spain as a whole, Mallorca and Malaga together account for over half of the country’s prime property market. Other notable regions include Madrid (9%), Barcelona (7%), Alicante (7%), and Ibiza (6%). The Balearic Islands collectively comprise 34% of Spain’s luxury property market.
Despite Mallorca’s strong appeal to domestic and international buyers, the limited availability of land for new developments is driving up property prices. By the end of 2024, the average property price in the Balearics rose by 10.8% year-on-year to €3,187 per square metre. Palma specifically saw prices climb 17.9% in February 2025, reaching €4,636 per square metre.