The Balearic Islands closed 2025 with 14,295 residential transactions, a 6.5% year-on-year increase and 4% above the ten-year average, according to figures published by IBESTAT, the Balearic Government’s statistics office.
Average prices rose 9% in €/sqm terms, per General Council of Notaries data – comfortably outpacing Spanish consumer price inflation, which held below 3% across the year.
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The headline figures point to a market operating above long-term norms without the volatility seen in more speculative European destinations.
Housing starts climbed 31.7% to 4,807, nearly 57% above the ten-year average of 3,053 – a meaningful uplift in construction activity, though one that remains modest against the scale of underlying demand.
The demand rotation
The more consequential shift sits beneath the topline. Spanish Housing Ministry data shows purchases by Spanish buyers rose 6% to 10,191, while foreign transactions fell 10% to 5,258.
The foreign buyer share dropped from 38% in 2024 to 34% in 2025 – the lowest level since the pandemic year of 2020, and below the ten-year average of 38%.
Foreign non-resident purchases fell 12% year-on-year; foreign resident purchases fell 6%. The pattern suggests both stronger domestic activity and a more selective international buyer following several years of exceptionally strong overseas demand.
For a market long characterised by its international profile – and by the assumption that foreign capital sets the tone – a return toward a two-thirds domestic share represents a structural repositioning, not a cyclical dip.
Three markets, one archipelago
The three islands continued to move at different speeds.
Mallorca
The largest of the Balearic Isles recorded 10,775 sales (+6.5% year-on-year), holding its position as the archipelago’s liquid anchor and around 3% above its own ten-year average.
Ibiza
La Isla Blanca saw the sharpest rebound with 1,819 sales (+15%), nearly 12% above its decade norm – a decisive move above the moderation seen in 2024.
Menorca
The second-biggest island in the archipelago recorded 1,701 transactions, down just over 1% year-on-year but still 5% above its ten-year average, consistent with its lower-volatility profile.
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Buyer nationalities differ meaningfully by island. Mallorca remains the most German-weighted market by a considerable margin. Menorca skews toward Spanish, British, and French purchasers.
Ibiza carries the broadest international mix, with Spanish, German, British, Swiss, and Benelux buyers all represented in significant shares. The three markets are increasingly worth treating as distinct rather than aggregate.
Structural drivers
Writing in Engel & Völkers’ Balearic Islands Market Report 2025–26, Managing Director for the Balearics, Florian Hofer, characterised the underlying demand as increasingly structural rather than speculative.
Hofer pointed to flexible working patterns enabling longer stays or full relocation, alongside fiscal reforms that have strengthened the islands’ appeal to internationally mobile residents.
Supply-side constraints remain a defining feature: strict planning frameworks, limited developable land, and environmental protections continue to cap the pace at which new stock can enter the market.
Tourism reached a fresh record of more than 19 million visitors, up 1.7% year-on-year, with Menorca posting the strongest growth. Air connectivity continues to improve, including a direct Palma–Montreal route via Air Canada, which launched in June 2026.
What to watch
There are two dynamics in the 2025 data warrant closer examination. The first is the demand rotation itself: what a sustained shift toward domestic buyer share means for a market that has historically been shaped, and priced, by international capital.
The second is the interplay between headline price growth and the composition of transactions at the top of the market – where reported averages can move for reasons other than like-for-like appreciation.
TSP will return to both questions in a follow-up market intelligence analysis next week.
Sourced from Engel & Völkers Balearic Islands Market Report 2025–26, drawing on IBESTAT, General Council of Notaries, Spanish Ministry of Housing, and AETIB data.
