Housing growth in Mallorca could lead to a sell-off among the island's residents

Third of all fincas and apartments that changed hands in Mallorca in 2022 were acquired by buyers from outside the island, local authorities report. The data also shows that more than half of all property buyers in 2021 had a foreign passport, with buyers from German-speaking countries being particularly prominent.

If real estate agents on the island are to be believed, demand for property in Mallorca is likely to continue in 2023. However, with the real estate boom, there is growing pressure on the Social Democrat-led regional government to restrict sales to foreigners and non-residents. Authorities are considering similar measures as in Canada, where foreigners are banned from buying real estate for the next two years.

Even rental apartments are becoming unaffordable for many. The plan to restrict sales to foreigners comes at a time when residents of the Balearic Islands, including Ibiza, Formentera and Menorca in addition to Mallorca, can no longer find affordable housing for their own use. Even rental housing is becoming unaffordable for many locals.

Locals frustrated with property prices and rents are demanding that the island belong to them, not foreigners. In 2022, property prices on the island increased by 8% and rents rose by 14.5%, according to real estate portal Idealista. "The Balearic Islands should not be turned into a theme park where locals no longer have a place to live," said Mallorca's Economy Minister Iyago Negueruela, addressing the issue of rising real estate prices in the Balearic Islands' regional parliament recently. He also said that the regulation of the real estate market should be discussed openly and in the light of "growing tensions among the population".

The restrictions on purchases made by European citizens would contravene EU law, which guarantees freedom of movement for all citizens in the 27-member bloc. Support for the ruling Social Democrats in the island's parliament is provided by the left-wing party Mes.

For months, news of sensational real estate deals has been causing outrage among locals and feeding anger over the fact that much of Mallorca is gradually passing into foreign hands. This comes after many celebrities from Germany, Austria or Switzerland have already made the island their second home in the past. In recent months, however, wealthy individuals from many other parts of the world also seem to have discovered the island as a lucrative business proposition, "outbidding each other for gems," according to local newspaper Diario de Mallorca.

The sale of the castle-palace Sa Fortalesa, located on a magical peninsula north of the town of Pollensa, has become the latest record-breaking real estate deal. The estate, including its own harbor, was purchased by Norwegian billionaire Erik Tollefsen for 62 million euros ($66 million), according to Kapital, Norway's leading business newspaper. Tollefsen owns investment company Fredensborg, which controls one of Europe's largest real estate holdings, Heimstaden - owner of 155,000 residential properties, mostly in Germany and Scandinavia.

A billionaire's island? Not far from Tollefsen's luxurious palace, another foreigner has spent large sums acquiring Mallorca's premium real estate. Mexican billionaire Fernando Chico Pardo paid 165 million euros for the five-star Hotel Formentor, one of Mallorca's most emblematic coastal hotels, steeped in local history, with a sprawling park and hunting grounds. However, Pardo has sparked widespread protests by starting to demolish the nearly 100-year-old building to build a new, more luxurious hotel in violation of preservation rules.

The recent acquisitions by British billionaires, brothers David and Simon Reuben, have also sparked outrage on the island. They have long been one of the largest landowners in Mallorca, but have recently expanded their holdings with two huge estates in north Pollensa and southwest Andratxa. The Rubena brothers now own a total of 13 square kilometers (5 square miles) of land in Mallorca, including a 10-kilometer (6-mile) stretch of the island's gorgeous coastline.