In their new Balearic Market Report 2025/26, international luxury property specialists Engel & Völkers’ report transacting €905 million of Balearic residential property in 2025.
The figures behind that number describe a market repricing upward on a tighter, more selective base than the headline volume suggests.
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This report reads Engel & Völkers’ proprietary data through The Super Prime’s lens to find where premium value is forming, who is paying for it, and why the scarcity behind it is more durable than the year’s construction figures imply.
An executive thesis
The defining figure of 2025 is not a price. It is €905 million – Engel & Völkers’ Balearic transaction volume, up nearly 8% and more than 40% above the firm’s ten-year average – achieved while unit sales held broadly flat at 489, down just over 1% but still 16% above the decade norm. Fewer deals, higher values: the signature of a premium segment consolidating, not retreating.
The wider market corroborates the direction without matching the intensity. Total Balearic home sales reached 14,295 (IBESTAT), up 6.5%, while average values rose 9% in €/sqm terms against inflation below 3% – a real return few European markets matched.
Two currents beneath the headline sharpen the thesis rather than soften it. Foreign buyers’ share of the market eased to 34%, its lowest since 2020, which represents a rebalancing toward a broader base, not a retreat.
And new construction accelerated sharply off a low base, yet remains structurally below the level demand requires. This means Balearic premium values are supported less by momentum than by scarcity, selectivity, and a buyer base wide enough to absorb a shift in any one part of it.
What Engel & Völkers' book shows
Public statistics describe the market in aggregate. E&V’s transaction record describes its upper tier with a granularity no official source provides.
The firm’s average sale price – €1.85 million across the Balearics – is calculated simply: transaction turnover divided by unit sales. Asked to clarify, Engel & Völkers confirmed this directly: the figure carries no like-for-like adjustment for what actually sold.
That confirms what the distribution of sales implies. Just 6.2% of E&V’s 489 transactions closed above €5 million – fewer than one deal in sixteen – yet that thin band, including several sales above €10 million, pulls a straight average sharply upward. Nearly half of all sales (49.4%) closed below €1 million. The average describes the tail, not the typical buyer.
This reframes where 2025’s strength lay. Unit activity below €1 million held the book liquid; value growth came from the top – a market doing fewer, larger deals and consolidating around its scarcest assets.
The buyer structure reinforces it. Individuals accounted for 85% of transactions, corporate vehicles 15% – a market of principals, not funds, insulated from the rate cycle that repriced more leveraged European markets.
Nationality completes the picture: German purchasers anchor 48% of E&V’s total transactions, a testament to the firm’s deep historical market leadership in this core demographic. Resilience in E&V’s book is supported by an expanding international tail. Double-digit arrival growth from Swiss, French, and North American visitors shows the broader buyer base is diversifying behind E&V’s core footprint.
Demand: The shape of international appetite
The official record shows how internationalism is changing. Foreign buyers’ share of Balearic transactions fell from 38% to 34% – the lowest since 2020 – led by a 12% drop in non-resident purchases, the segment most exposed to currency and cross-border friction, and precisely the one the prime market relies on at the top of the price range.
German buyers anchor close to half of E&V’s book, yet German tourism to the Balearics fell 1.8% in 2025, and to Mallorca specifically 1.7%. Tourism is not a direct proxy for purchase intent, but for a buyer market built on familiarity – the visitor who returns, then stays, then buys – a softening at the top of that funnel in the single most important source market is worth naming plainly.
What offsets it is breadth arriving from elsewhere. French arrivals rose 15.4%, Swiss 19.5%, Italian 12.6%, American 19.7% – the last reinforced from June 2026 by Air Canada’s first-ever nonstop between the Balearics and North America, routed through Montréal with US preclearance.
“The market's base is widening fast enough to absorb a wobble in any one source – though the transition is still underway, the largest single dependency has not yet been outgrown”
E&V’s own nationality mix already shows Swiss, Scandinavian and American buyers thickening the book’s tail. The market is widening its base fast enough to absorb a wobble in any one source – though the transition is still underway, and the largest single dependency has not yet been outgrown.
Fiscal architecture reinforces the pull. Spain’s GDP grew 2.8% in 2025, and the Balearic succession-tax exemption between close relatives, extended in July 2025 to lifetime gifts, lowers the friction of relocation for the equity-led buyers driving the market.
Crucially, because these major succession-tax benefits tie directly to fiscal residency, this tax architecture acts as a direct catalyst for the structural shift E&V identifies: transforming the Balearics from a holiday second-home destination into a primary, semi-permanent or permanent residence.
Supply: Scarcity under pressure
The scarcity thesis is the load-bearing wall of every Balearic narrative. 2025, perhaps, was the year construction accelerated hardest against it.
Housing starts reached 4,807, up 32% and nearly 57% above the ten-year average – Mallorca 3,631 (+34.5%), Ibiza 853 (+25%), Menorca 323 (+22%). While this represents a decade-high acceleration in percentage terms, the numbers show this growth is building off a historically low baseline.
When contrasted against 14,295 total sales, this measured expansion in building activity actually reinforces E&V’s structural scarcity narrative: the region is expanding its pipeline to meet demand, but not at a pace that threatens long-term price stability.
What makes the constraint durable is the regime governing what can be built on the dwindling amount of undeveloped land; planning controls, protected zones, and, across Menorca and much of Ibiza, UNESCO Biosphere status that forecloses large-scale development outright.
Policy and geography cannot be considered market signals, and they do not loosen when prices rise. Construction rose in 2025 yet the constraint held. That is the more important fact for a buyer weighing Balearic prime against a more freely supplied alternative.
Price: Separating signal from mix
The most quotable price figures are often the least comparable, and the 2025 data contains exactly that trap.
The cleanest measure: average residential values rose 9% in €/sqm terms – notarial, like-for-like data tracking a comparable property and not the mix of what sold. Against inflation below 3%, that is a real-terms gain of roughly six points; over five years, 55%. This is the figure to anchor on.
E&V’s average sale price – €1.85 million Balearics-wide, €1.97 million in Mallorca, and a striking rise of around 25% in Ibiza – is a different measure entirely, and the firm is transparent about why: turnover divided by units, with no adjustment for what actually sold.
“Growth that is real, top-heavy and moderate looks contradictory only if the measures are confused; kept apart they paint a picture of discipline”
The Ibiza average climbed because E&V sold proportionally more at the top of the market and not because any given villa rose a quarter in value in 12 months. The like-for-like figures, which E&V also report, show Ibiza appreciation of 3.6% in Ibiza town and 5.3% in the southwest. Those are the numbers to price against.
Once mix effects are set aside, the like-for-like data shows a market decelerating from its post-pandemic peak into sustainable growth. The good news is they are not reversing – 9% €/sqm growth, slower than prior years, yet faster than inflation.
Mallorca’s asking-price tables corroborate it: top-tier locations in the West, Southeast and Son Vida pushed higher, while average and good-location bands held flat. Growth that is real, top-heavy and moderate looks contradictory only if the measures are confused; kept apart they paint a picture of discipline.
The Balearics: Three markets, not one
Treating the Balearics as a single property market obscures the reality on the ground. Headline regional data flattens out deep structural differences in inventory, velocity, and buyer demographics. In practice, Mallorca, Menorca, and Ibiza move on independent cycles.
As Engel & Völkers point out, true valuation requires analysing each island as a distinct residential ecosystem.
Mallorca
A liquid core, consolidating rather than accelerating: 10,775 island-wide sales (+6.5%) against E&V’s own 405 Mallorca sales (down just under 7%) and €796.7 million in transaction volume (+3%, 38% above the decade average). Fewer deals, more value – the same consolidation pattern expressed in the largest market. Depth is what makes it liquid with differentiation living in its sub-markets such as the equity-rich ultra-prime of Son Vida (villas listing €8–14 million), to the relocation-driven West Coast.
Menorca
Mallorca’s inverse: 74% of E&V’s Menorca sales closed below €1 million, a market centred on accessible premium rather than ultra-prime. Sales held broadly flat (1,701, 5% above the decade average); prices moved in single points. Operating under one of Spain’s most restrictive planning frameworks, Menorca sells stability over momentum – a buyer base of families and mature second-home purchasers.
Ibiza
Rebounded the hardest: 1,819 sales, up almost 15% and nearly 12% above the ten-year average – a decisive move after the previous year’s moderation. E&V describe 2025 as the year the correction cycle ended, a claim the data supports: apartment prices rose across all segments while villa values held firm, the profile of a market rebuilding confidence from the accessible end upward. Ibiza’s buyer base is also the most diversified of the three – Spanish 27%, German 20% – leaving it least exposed to any single nationality.
A buyer who reads the archipelago as one market sees an average that describes none of them.
An outlook for 2026-27
Three findings, stripped of momentum language, have carried well into 2026. Value is held by scarcity, not sentiment – a regulation-driven constraint that does not loosen when prices rise, and which 2025’s decade-high construction left intact.
The buyer base is widening beneath its concentration – German dependency remains real, but double-digit growth from France, Switzerland, Italy and the US, reinforced by direct North American access from June 2026, is broadening the base fast enough to absorb a wobble in any single source.
“Value is held by scarcity, not sentiment – a regulation-driven constraint that does not loosen when prices rise”
And the market is pricing with discipline – decelerating into sustainable growth, correcting overpriced stock, and rewarding only realistic asking prices.
None of this requires the islands to outperform. It requires only that 2025’s conditions persist, and every structural indicator suggests they will.
Methodology & sources
Produced by The Super Prime using Engel & Völkers Balearic Islands Report 2026 data. Proprietary transaction data – sales volumes, values, price-bracket and nationality breakdowns – was provided by Engel & Völkers and reflects the firm’s own book, not a market-wide sample; a distinction Engel & Völkers confirmed on request.
Average sale price figures are calculated as total transaction turnover divided by unit sales, with no like-for-like adjustment for property mix – the basis for this report’s distinction between E&V’s headline averages and genuine market appreciation. Interpretation and analysis are The Super Prime’s own.
Market-wide figures are drawn from IBESTAT, the Spanish Housing Ministry, the General Council of Notaries, INE and AETIB. The Balearic succession-tax exemption on lifetime gifts (effective 25 July 2025, Decree-Law 4/2025) and Spain’s regime for inbound professionals are referenced as context and are subject to individual eligibility; neither should be relied on without professional advice.
This report is market intelligence, not investment, tax or legal advice.
