Market at a Glance: A Story of Growth
11.71%
Property Price Increase in Palma (2024-2025)
13%
Rental Price Increase Across Mallorca (2024)
~40%
of Property Transactions by Foreign Buyers (2023)
Rental Price Trajectory (€/m²)
The average cost per square meter for long-term rentals has seen a steep climb, with projections indicating continued, albeit more moderate, growth into 2025.
2025 Estimated Monthly Rent by Area
Rental costs vary significantly across the island. Luxury coastal areas command premium prices, while inland towns offer more affordable options for family homes.
The Supply & Demand Crisis
The Housing Shortfall
Mallorca faces a critical housing deficit, needing tens of thousands of new homes to meet demand and prevent strain on public services.
45,000
New homes needed by 2029
Shift in Rental Listings
Tenant-friendly laws have unintentionally pushed landlords towards less-regulated seasonal lets, shrinking the long-term rental pool.
The Widening Affordability Gap
Over the last decade, rental prices have skyrocketed, far outpacing the growth in average salaries and creating significant financial pressure on local residents.
Understanding Your Rental Rights (LAU)
Spain's Urban Lease Law (LAU) provides strong protections for tenants in long-term residential contracts. Here are the key provisions that define the landlord-tenant relationship.
Minimum Lease Term
Tenants have the right to a 5-year lease (if the landlord is an individual) or a 7-year lease (if a company), providing significant stability.
Rent Increase Control
Rent can only be increased annually and is typically capped by the official inflation rate (IPC), preventing arbitrary price hikes.
Early Termination
Tenants can terminate the contract after 6 months with 30 days' notice, offering a degree of flexibility.
Security Deposit
Legally capped at one month's rent for unfurnished properties and two for furnished. It must be returned within 30 days of lease end.
Landlord's Repair Duty
The landlord is responsible for all major repairs needed to keep the property habitable, unless damage is caused by the tenant.
Agency Fees
Recent law changes mandate that the property owner, not the tenant, is responsible for paying the real estate agency fees.