A third of all fincas and apartments that changed hands on Mallorca in 2022 were purchased by buyers from outside the holiday island, according to the local authorities. The data also shows that in 2021 more than half of all property buyers had a foreign passport, with buyers especially from German-speaking countries leading the statistics. If you believe real estate agents on the island, the run on Mallorca's real estate is likely to continue in 2023.

However, amid the property boom, pressure is mounting on the Social Democrat-led regional government to curb the sellout by limiting sales to foreigners and nonresidents. Authorities are weighing similar steps like Canada, where foreigners are no longer allowed to buy real estate for the coming two years.

Even rented apartments unaffordable for many

The plan to curb foreign sales comes as the inhabitants of the Balearic Islands — including Ibiza, Formentera and Menorca alongside Mallorca — can no longer find affordable housing for their own use. Even rental housing is out of reach for many locals.

In 2022, property prices on the island rose by 8%, while rents climbed as much as 14.5%, according to real estate portal Idealista.

"The Balearic Islands must not become a theme park where residents no longer have a place to live," said Iago Negueruela, Mallorca's economy minister, as he addressed the issue of spiraling property prices in the Balearic regional parliament recently. He also noted that property market regulation must be discussed openly and in light of "growing tensions among the population."

However, restrictions on purchases made by European citizens will contradict EU law, which guarantees freedom of movement for all citizens in the 27-nation bloc.

Spectacular deals

Support for the ruling Social Democrats in the island's parliament comes from the left-wing Mes party. Josep Castells, a Mes member of the regional parliament, complained in a recent interview with the German-language newspaper Mallorca Zeitung that locals can no longer keep up in the race, unable to afford even a first home, while many foreigners buy real estate for a second residence.

For months, news of spectacular real estate deals have caused indignation among locals, and is fueling anger about large parts of Mallorca gradually passing into foreign hands. This after many celebrities from Germany, Austria or Switzerland have already made the island their second place of residence in the past.

In recent months, however, the rich from many other parts of the world also seem to have discovered the island as a lucrative business proposition "outbidding each other for the jewels," as the local newspaper Diario de Mallorca wrote.

The sale of the castle-like Sa Fortalesa palace, situated on an enchanted peninsula north of the town of Pollenca, was the latest record-breaking property deal. The estate, including its own harbor, was acquired by Norwegian billionaire Erik Tollefsen for €62 million ($66 million), according to Norway's leading business paper Kapital.

Tollefsen, 61, owns the Fredensborg investment company, which controls one of Europe's biggest real estate concerns, Heimstaden — the owner of 155,000 residential properties, mostly in Germany and Scandinavia.

A billionaires' island?

Not far from Tollefsen's dream palace, another foreigner spent big on a plot of prime Mallorca real estate. Mexican billionaire Fernando Chico Pardo shelled out €165 million for the five-star Hotel Formentor, one of Mallorca's most emblematic seaside hotels steeped in local history with a spacious park and hunting grounds.

But Pardo caused a massive outcry as he began tearing down the almost 100-year-old building to build a new, more luxurious hotel in violation of preservation rules.

The recent acquisitions made by the British billionaire brothers, David and Simon Reuben, also caused outrage on the island. They have long been among the biggest landowners on Mallorca, but expanded their holdings recently with two huge estates in northern Pollenca and southwestern Andratx. The Reuben brothers now own a total of 13 square kilometers (5 square miles) of land on Mallorca, including a 10-kilometer (6-mile) stretch of the island's splendid coast.

This article was originally published in German.