The property market in the Balearics continues its upward trend and house prices on the islands are expected to continue rising in 2026, driven in particular by high demand from international buyers and a shortage of new builds. According to José Miguel Artieda, president of the Association of Real Estate Agents (API) in the Balearics, ‘unfortunately, everything will remain the same’ during the coming year, with estimates of an increase in house prices of more than 8%, based on data from the property registries.
According to Artieda, the Balearic property market has seen a decade of significant increases, leading the way in both prices and activity. The year 2025 is expected to close with growth of around 10%, and in the following year the rate of increase could exceed 7% or 8%, without this meaning that prices will reach their peak.
‘We hold national records in prices, transactions, household debt and growth. It seems that there is no limit to this and that the expectation of price increases encourages this behaviour,’ he said. A key factor is international interest: between 2007 and 2025, according to the General Council of Notaries, foreign buyers have purchased 38% of the homes in the region.
In terms of residential rent in the Balearics, the difficulties are worsening with the imminent expiry of around 24,000 contracts this year, which will have a particular impact on residents with lower borrowing capacity. Artieda points out that ‘residents are reaching the ceiling of their borrowing capacity for rent’. Data from the Ministry of Social Rights puts the average annual increase in rents on the islands at €4,615, the highest figure in the country. In the words of Ángela Pons, spokesperson for the Platform for People Affected by Mortgages (PAH) in Mallorca, ‘every day we receive messages from people whose leases are ending,’ adding: ‘We are talking about citizens who earn €2,000 a month and will be left on the street.’
The Balearics top the national price ranking with €4,097 per square metre. This figure leaves Madrid (€3,549/m²), the Basque Country (€3,027/m²), Catalonia (€2,278/m²) and the Canary Islands (€2,055/m²) far behind. The contrast is even greater when compared to Extremadura (€627/m²), where the cost of a home in the Balearics would allow you to purchase up to six properties in the cheapest region.
The Balearic government has adopted various measures in recent months to mitigate the crisis. These include the decree law on urgent measures in the field of housing, the law on strategic residential projects approved in 2025, the “Alquiler Seguro” (Secure Rent) programme and a tax deduction for landlords who do not increase the rent at the end of the contract. President Marga Prohens announced the construction of more than 1,000 public housing units by the Balearic Housing Institute (Ibavi) during 2026. Artieda welcomes the work promoted by the administration and its commitment to projects aimed at residents.
However, for the PAH spokesperson, the institutional response is ‘far from resolving the housing emergency’. Pons criticises the lack of implementation of measures contemplated in the state housing law and considers it a priority to ‘put a stop to tourist rentals in order to recover homes for the residential market’. She also warns of a possible exodus of essential workers due to the lack of affordable housing: ‘People will have to leave the Balearics, and many will be restaurant or construction workers. Businesses and shops will close. They are contributing to an exodus of people who are needed.’