Palma de Mallorca, long celebrated as one of Europe’s most desirable places to live, is now grappling with an extraordinary property shortage.
According to Idealista, the number of homes for sale in the city has dropped to its lowest ever recorded level, leaving estate agents short of stock, buyers with fewer options, and sellers in a commanding position.
A Market Running Dry
Palma currently has around 4,400 homes listed for sale, compared with nearly 18,600 across the island of Mallorca. For a city with over 400,000 residents, that figure is startlingly low.
Neighbourhood breakdowns reveal just how scarce choice has become:
Playa de Palma: ~362 homes available
Llevant – La Soledat: ~230 homes
Old Town (Casco Antiguo): fewer than 150 listings, with prices averaging €4,500–6,000/m²
Even so-called “cheap properties” starting around €39,000 are limited and snapped up almost instantly.
Rising Prices Add Pressure
From May 2024 to April 2025, Palma’s average property prices climbed from €4,860/m² to €5,429/m², an 11.7% rise in just one year. For comparison, the Balearic Islands’ average stood at €4,707/m² in December 2024.
This growth underscores what agents and buyers already feel on the ground: demand remains strong, but supply simply isn’t keeping up.
Agencies Closing Their Doors
The Balearic Islands Association of Real Estate Agents (API) has confirmed that some agencies have already closed. According to president José Miguel Artieda, firms that once carried 40–60 listings now have just four to eight, a level too low to keep many businesses running.
Some offices are merging, others pivoting to rentals, but the message is clear: the traditional resale agency model is under pressure.
Why Is Supply So Tight?
Strong demand: International and local buyers continue to compete for limited stock.
Construction mismatch: Too much focus on luxury second homes, not enough mid-market or affordable housing for residents.
Policy delays: The proposed Obtención de Suelo land-release scheme may eventually help, but its impact is years away.
What It Means for Buyers and Sellers
Buyers should prepare for fierce competition, quick decision-making, and less room to negotiate.
Sellers are in a strong position, with realistic pricing often sparking multiple bids.
Developers who focus on resident-friendly, mid-market homes could capture the greatest demand going forward.
Bottom line.
Yes—this is really happening. Palma’s property market is experiencing a supply shortage unlike anything seen before. With listings at historic lows, prices rising sharply, and agencies closing their doors, Palma has become one of Europe’s most competitive and constrained property markets.
Until more housing is built that matches real demand, the city’s property squeeze is set to continue.
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