Our forecast for the South East 2024-25

Since 2023, the real estate market in Mallorca has seen remarkable growth. According to reports, the average price per square meter on the island in 2024 with an increase of around 11.2 % compared to the previous year. These figures reflect the continued interest in real estate on the island, driven primarily by international buyers.

In the southeast of Mallorca, a region that is considered quieter compared to the tourist hotspots in the west and southwest, significant price increases were also recorded. Here, prices in popular towns such as Santanyí, Felanitx and Cala d’Or have reached above-average levels in some cases. Santanyí in particular has emerged as a hotspot for luxury properties, with prices per square meter for new builds averaging 6,500 euros in 2024. This is a clear sign that real estate in Santanyi remains a preferred location for foreign investors and buyers.

Regional differences and the focus on the Southeast

The southeast of Mallorca is characterized by its breathtaking coastline with small bays such as Cala Mondragó, Cala Figuera and Cala Santanyí. The tranquil atmosphere and proximity to nature make the region particularly attractive for buyers looking for a retreat away from the crowds. The picturesque villages such as Es Llombards, Ses Salines and Colònia de Sant Jordi also contribute to the region’s appeal.

A key factor in the rise in property prices in this part of the island is the limited supply of building land. Many of these coastal locations are protected, which makes it difficult to build new properties and therefore makes the existing supply particularly valuable. The demand for luxury villas and rural estates, known as fincas, has driven prices up continuously in recent years. According to a study from this year, properties in the coastal regions in the southeast of Mallorca are expected to continue to increase in value by around 5% per year in 2024.

Demand from international buyers

The demand for real estate in Mallorca is largely determined by international buyers. Around 33% of real estate transactions on the island in 2024 were made by foreign buyers, whereby buyers from Germany, Great Britain and Scandinavia play a leading role. In regions such as the South East, these figures are often even higher, as the international market is particularly strong here. Many of these buyers are looking for second homes or investment properties that offer both a high quality of life and promise long-term value appreciation.

One interesting aspect in this context is the growing influence of buyers from the United States and the United Arab Emirates. New flight connections and increased visibility in the international media have also made Mallorca more attractive to these markets. As a result, the number of real estate purchases by US citizens by 8% in 2024 compared to the previous year, while buyers from the Emirates recorded an increase of 5%.

Real estate types and trends in the Southeast

In the southeast of Mallorca, two types of property are particularly in demand: luxurious new builds and fincas in need of renovation. The demand for new builds has risen sharply in recent years, as many buyers prefer high-quality, modern properties with amenities such as infinity pools, sea views and energy-efficient technologies. The average price for new builds in the region in 2024 is around 5,000 to 6,500 euros per square meter, depending on location and features.

At the same time, traditional fincas are enjoying great popularity. These rural properties often offer plenty of land, privacy and the opportunity to enjoy the Mallorcan lifestyle surrounded by nature. Many international buyers invest in these properties in order to renovate them according to their own ideas and adapt them to modern standards. The price of such properties varies greatly depending on the condition of the property and the size of the land. In 2024, fincas in need of renovation are offered with plots starting at 500,000 euros, while fully renovated and modernized fincas can cost up to several million euros.

Letting market and yield opportunities

In addition to the purchase of real estate as a second home or investment property, the rental market in Mallorca has also gained in importance in recent years. Vacation properties in popular coastal regions such as Cala d’Or or Colònia de Sant Jordi/Ses Salines in particular offer attractive yield opportunities. The average rental prices for vacation properties in the southeast of the island in 2024 will be around EUR 2,000 to 3,500 per week in the high season.

The high demand for vacation accommodation, particularly from tourists from Germany and Scandinavia, has led many investors to invest in vacation properties in order to benefit from the high rental income. With the increasing number of digital nomads and long-term vacationers choosing Mallorca as a destination for remote work and long-term stays, the rental market could gain even more momentum in 2024-2025.

Future prospects for the real estate market in the southeast of Mallorca

The future of the real estate market in the southeast of Mallorca looks promising. Despite the challenges posed by rising mortgage rates and economic uncertainty in Europe, the island remains a safe haven for many investors. We forecast that real estate prices in the region will remain stable or even continue to rise in the coming years. This is mainly due to the limited supply of building land, the high demand for luxury real estate and the growing international market.

Another important factor for the future of the market is sustainability. More and more buyers, especially in the luxury segment, are attaching importance to environmentally friendly construction methods and energy-efficient technologies. Solar panels, heat pumps and sustainable materials are sought-after features that can increase the value of a property. These trends are expected to gain in importance in the coming years and shape the real estate market in the southeast of Mallorca.

 

Conclusion

The real estate market in the southeast of Mallorca has proven to be particularly dynamic in 2024. With rising prices, high demand from international buyers and attractive yield opportunities the region remains a sought-after destination for investors and buyers. The limited space for new buildings and the growing interest in sustainable construction methods will continue to drive the market in the coming years. The combination of a combination of a breathtaking landscape, an excellent quality of life and stable increases in value makes the southeast of of Mallorca one of the most exciting real estate markets in Europe.