Rental prices in the Balearic Islands have risen by 142 percent since 2015
Rental prices in Mallorca have increased by 142% over the last ten years, putting the market in a critical position.
High demand and limited supply are driving prices even higher. The inflation does the rest. Palma is one of the cities with the highest price increases in Spain.
This increase puts the island in a critical position in the national real estate market, as demand continues to exceed available supply. In February 2025, the average rental price per square meter reached €18.40, confirming the continued upward trend of recent years. This represents a 20% increase compared to the same month last year and demonstrates the difficulties many residents face in accessing housing.
The islands of Mallorca, Menorca, Ibiza, and Formentera have all experienced significant price increases, with Ibiza leading the way with an average price of over €22 per square meter. On Mallorca, prices range between €17 and €19 depending on the location, while Menorca and Formentera have also seen continuous price increases.
Spain's provincial capitals in comparison: Palma in second place
In 2025, eight provincial capitals more than doubled their rental prices compared to February 2015. Valencia leads the list with an increase of 185 percent. Palma follows with an increase of 138 percent, followed by Santa Cruz de Tenerife (136 percent), Málaga (134 percent), Alicante (127 percent), Las Palmas de Gran Canaria (115 percent), Lugo (111 percent), and Girona (101 percent).
At the other end of the scale is Jaén, where rents have increased the least over the past ten years, by 31 percent. This is followed by Palencia (44 percent), Córdoba (45 percent), Salamanca (45 percent), Vitoria (46 percent), and Badajoz (49 percent).
Driving factors of price increases
The increase in rents in the Balearic Islands can be attributed to several key factors. These include high demand from residents and temporary workers, the boom in the vacation rental market, and the shortage of available housing. Another factor is the lack of support for social or affordable housing, which makes access to affordable rents difficult. Rising demand combined with stagnating supply creates an imbalance that is reflected in rising prices.