In the Balearic Islands, the luxury real estate sector is becoming increasingly significant, especially within the European and international markets. According to real estate consultancy CBRE, 12% of properties sold in the archipelago are priced above three million euros, with this figure rising to nearly 25% in Ibiza, Formentera, and southwest Mallorca, and 7% in Palma. Despite a 20% decrease in total real estate transactions and a 21% drop in sales to foreigners in the past year—attributed to the unusually high market activity in 2022—foreign buyers still made up 31.5% of transactions, leading Spain. Germans dominate these foreign transactions at 44%, followed by the British (11%) and the French (5%). Looking forward, CBRE anticipates a persistent supply-demand mismatch in the housing market, with construction lagging behind demand due to high migration, though price increases are slowing compared to rental rates.
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