Fears from Mallorca real estate boom: locals fear dwindling supply

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

If real estate agents on the island are to be believed, the Majorcan property boom is likely to continue into 2023. However, amid 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 out of reach for many. The plan to restrict sales to foreigners comes as residents of the Balearic Islands, including Ibiza, Formentera and Menorca, can no longer afford to buy homes for their own use. Even renting is becoming unaffordable for many locals. Locals, frustrated with property prices and rents, are demanding that the island belong to them, not foreigners.

Support for the ruling Social Democratic Party on the island comes from the left-wing party Mes. Josep Castells, a regional MP for the Mes party, complained in a recent interview with German newspaper Mallorca Zeitung that locals are no longer in the race, unable to afford even a first home, while many foreigners are buying property for second homes.

For months, news of impressive real estate deals has been causing outrage among locals and feeding anger that much of Mallorca is gradually falling into foreign hands. This comes after many celebrities from Germany, Austria or Switzerland have already made the island their second home in the past.

The purchase 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 castle, along with 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, 61, owns Fredensborg, an investment company that owns one of the largest real estate properties in Europe, Heimstaden owns 155,000 residential properties, mostly in Germany and Scandinavia.

A billionaire's island? Not far from Tollefsen's dreamy palace, another foreigner has spent large sums to acquire prestigious Majorcan real estate. Mexican billionaire Fernando Chico Pardo shelled out 165 million euros for the five-star Hotel Formentor, one of Mallorca's most emblematic seaside hotels, steeped in local history, with a sprawling park and hunting grounds. However, Pardo has caused huge outrage 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 billionaire brothers David and Simon Reuben have also caused outrage on the island. They have long been one of the largest landowners in Mallorca, but have recently expanded their holdings with two more huge estates in the north of Pollensa and southwest of Andratxa. The Ruben brothers currently own a total of 13 square kilometers of land in Mallorca, including a 10-kilometer stretch of the island's magnificent coastline.