A leading real estate agent, who typically operates at the high end of the market with many foreign clients, has warned that the largest and most popular Balearic island is now even too expensive for the rich.
Hans Lenz of Engel & Völkers, and president of the ABINI association of national and international real-estate agents, said: “Majorca is now too expensive for the rich in the north (of Europe).
“This is why there is a significant diversion of buyers towards the mainland.”
He added that five or six sales of over 20million euros (£17million) are being made per year, but there are no sales above 40million (£33million).
Majorca, and much of the rest of Spain, is gripped by a housing crisis, which anti-tourism activists pin primarily on the high demand for properties from tourists, expats and foreign buyers with significant purchasing power, coupled with an unsatisfactory supply of new housing. This has led to rapidly rising prices that are pricing out locals.
According to a report by Caixabank Research, the number of sales to foreigners has grown by only 2% since 2019. Meanwhile, in Malaga or Alicante, it has shot up by 30% over the same period.
“Prices have risen a lot in recent years,” explained Lenz. “In Spain we are already the most expensive. Here it’s like Monopoly, and for new builds the costs are twice what they are on the mainland, without taking into account the price of the land.
“We must build for the people who live and work here. There is no need for more luxury housing. We must think about our residents, not just speculate.”
While property prices soar, local wages have not kept pace, making it increasingly difficult for locals to afford housing. The large influx of tourists during peak seasons puts further strain on the housing market as many locals rent out their properties to tourists instead of long-term residents.
In Palma, prices to rent single rooms, not even whole flats, can get to around 600 euros (£502), while a three-bedroom flat costs 1,600 euros (£1,339).
As a result of the housing crisis, protests have taken place in Majorca and across Spain, with demonstrators demanding limits on the number of holiday homes and apartments and an increase in affordable housing options.
In May 2024, around 10,000 demonstrators marched in the capital of Majorca holding posters that read “SOS Residents” and “Enough Mass Tourism”. Protests also took place on the neighbouring islands of Menorca and Ibiza.
To tackle the crisis, last month Pedro Sánchez announced controversial plans to impose a 100% tax on property purchases by non-EU residents, or a potential outright ban on sales.
Mr Sánchez hit out at non-EU buyers, labelling them as “speculators” who were out “just to make money”.