The beautiful Balearic island of Mallorca has become a magnet for elite vacationers and homeowners searching for the ultimate sun-soaked Spanish escape
In May of this year, Jeff Bezos touched down on Mallorca by private jet before boarding his brand new $500 million superyacht, 127-metre (417 ft) Koru—the largest privately owned sailing yacht in the world.
While the Amazon billionaire may not be your archetypal Balearic tourist, this story illustrates the direction these Spanish islands are headed: a playground for the rich and famous.
Cherished for their warm climate, cultural heritage, and pine-blanketed coastlines, Spain’s Balearics are some of the most in-demand vacation destinations on the planet. A mighty 16.4 million tourists descended on the key islands of Mallorca, Menorca, Ibiza, and Formentera in 2022.
But quantity is no longer the Balearic be-all and end-all. Today it’s all about quality—not least on the largest island, Mallorca.
From the UNESCO-protected Tramuntana mountain range in the northwest to the sandy beaches of the southeast, Mallorca has long ticked all the dream destination boxes. But while it used to court families with its cheap package vacations, the emphasis has switched to bespoke pleasure.
Whether it’s farm-to-fork fine dining or a holistic well-being retreat at a rural hideaway, a sunset champagne cruise on a sailing yacht, or a golf tournament at the island’s only private nine-hole course, Mallorca has something for every visitor.
Entrepreneurs Klas Käll and Barbara Bergman first came to Mallorca in the 1980s, and quickly fell for the climate and the culture—and each other.
In 2006, they purchased a defunct cinema in the heart of Palma’s old quarter and lovingly restored it to create a lifestyle emporium, Rialto Living, in the capital. The store now perfectly captures the zeitgeist for beautifully curated indulgence.
“The tourist authorities and the travel industry have worked hard to change the image of the island from a typical low-cost charter destination to one of upscale luxury,” Bergman says.
“Prestigious hotel chains have made their debuts on the island: InterContinental Hotels Group opened Kimpton Aysla in 2022 and Sir Richard Branson’s Virgin Limited Edition Son Bunyola burst onto the scene this summer, with interior design by us at Rialto Living. Much-loved Grand Hotel Son Net has been reimagined by the team behind Andalucia’s Finca Cortesin, while renovation projects for Mandarin Oriental Punta Negra and Four Seasons Resort Mallorca at Formentor are set to follow in 2024.
“Palma is a hotbed of upmarket boutique hotels, high-end fashion stores, and restaurants—Mallorca has a total of 11 Michelin stars. It’s a far cry from the Mallorca we knew four decades ago.”
Umami Group’s marketing director, Benjamin Henderson, agrees that Mallorca is a hotspot for bon vivants. With venues across the southwest, and a couple in Ibiza, the company is part of a vibrant food and drink scene.
“Mallorca offers everything a luxury-seeking foodie could ask for,” Henderson says. “You can expect to receive attentive service and savor Balearic flavors, safe in the knowledge that your produce has been freshly caught, picked, or delivered that same day.
“It’s easy to stumble upon a beautiful dining experience just steps away from where you have parked your yacht after a day on the water and, uniquely, Mallorca is primarily home to independents, meaning those dining experiences can’t be recreated anywhere else.”
For all these reasons and more Mallorca is firmly on the radar of top-level investors who wish to buy into a low-risk real estate market where prices are underpinned by a demand that outweighs supply.
For non-EU citizens, some gain their foothold via Spain’s golden investor visa, which has been in place since 2013. The program grants the option to reside and work in the country in return for a substantial capital investment.
Others apply for the permit du jour—the digital nomad visa. Part of the 2022 Spanish Startup Law, the tax-beneficial scheme offers temporary residency to foreigners who want to work from Spain as an employee of an overseas company or a freelancer earning the bulk of their income outside the territory.
But, for Mallorca, the biggest source market is EU big hitter Germany—and most are cash buyers. According to Spain’s College of Registrars, foreigners accounted for 34.38 percent of all Balearic home purchases in 2022—up 1.7 percent on the previous year. More than a third were priced at €500,000 ($559,147) or more.
Germans were responsible for 44.2 percent of those sales, followed by the British, French, Italians, and Swedes. Only 17 percent of these foreigners had to request finance from the bank—notable given Balearic house prices are the highest in Spain.
Andrea Berchtold has spent the past 18 years at the sharp end of Mallorca’s property market—four of them with Christie’s International Real Estate affiliate Luxury Estates Mallorca.
The company’s area of interest is the desirable southwest of the island—neighborhoods such as Port Andratx, Nova Santa Ponsa, Costa d’en Blanes, Puerto Portals, Bendinat, Sol de Mallorca, and Son Vida, with access to the best international schools, superyacht marinas, and the Mallorcan capital with its well-connected airport.
“After one-and-a-half years of pandemic-induced boom, we had a comparatively quiet winter at Luxury Estates Mallorca,” explains Berchtold.
“Around 90 percent of our clients are German and they are paying a major economic price for the war in Ukraine. Rising inflation, interest rates, and energy insecurity unnerved wealthy industrialists, forcing them to put their Mallorca ambition on hold. But they got tired of waiting and trade has started to pick up. Inventory is now the issue. Vendors noticed that there were fewer buyers around, so they delayed coming to market—we’re slowly encouraging them back.
“Apartments priced €600,000 to €1.5 million ($670,976-$1.68m) are always in demand and change hands rapidly. There’s plenty of appetite for villas around the €3 million ($3.35m) mark but, for this, buyers expect a sea view—and today that’s practically impossible. It’s similar for building plots. The average plot in the southwest costs more than €1 million ($1.12m)—just a few years ago they were half that price. Instead, it’s now the norm to buy an old house, knock it down, and start again.”
Some potential buyers are hesitant. They’re attending viewings, and then arranging a return trip for a few months’ time. Many think prices will come down, but Berchtold is certain they’ll be disappointed. Prices may be leveling out, but they won’t go down. Why? “Because they never have,” she says.
“Mallorca is an island, there is a finite supply of land, and the space that can be built on is always being reduced by the Balearic government.”
As for the future, Berchtold’s put away the crystal ball.
“Nothing is for certain. There are no steady trends and the market changes from one moment to another. Our only accurate prediction was the disappearance of the Brits post-Brexit. One thing for sure is that Germans adore Mallorca. They love the weather, the sea, and following friends who’ve taken the plunge. I can’t see this changing.”
View Mallorca retreats from our collection, and read more from the Fall/Winter 2023 issue of Christie’s International Real Estate magazine here.
Banner image: Westend61 / Getty
