Current Market Landscape for High-Yield Rentals in Mallorca
High Occupancy and Attractive Rental Yields
Mallorca’s thriving tourism market, attracting over 13 million visitors annually, ensures high occupancy rates for holiday rentals. Average rental yields for holiday properties hover around 6%, making short-term rentals an appealing income source for investors. The island’s mix of beaches, mountains, and cultural heritage adds to its year-round allure.
Luxury Villa Market Stability and Growth
The luxury villa market on Mallorca is particularly strong and stable. Between 2016 and 2024, the average asking price in the Balearic Islands (mainly Mallorca) more than doubled, increasing by 124%, reflecting sustained price appreciation even through economic uncertainties. Villas, often purchased outright by international buyers, tend to hold their value and provide attractive returns due to limited new supply and strict planning laws.
International Demand and Cash Buyers
The market is heavily supported by international investors—especially from Germany, the UK, Scandinavia, and increasingly the Middle East and USA—who often buy second homes or lifestyle properties as cash buyers. This financing profile limits exposure to local credit and interest rate fluctuations, supporting market resilience.
Strategic Investment Areas for High-Yield Rentals
Palma de Mallorca
The capital city is a hot spot for investment, with strong demand for both short-term and long-term rentals. Historic areas near the cathedral and marina, as well as upscale neighborhoods like Portixol and Santa Catalina, attract affluent renters. Palma’s accessibility, with an international airport and ferry connections, further enhances rental demand.
Puerto Andratx
Known for its exclusivity and luxury villas, this coastal area offers high rental returns driven by wealthy clientele seeking exclusivity and scenic views. Properties here tend to be larger luxury residences, attracting high-net-worth renters looking for premium holiday experiences.
Other Coastal and Mountain Areas
Locations such as Pollensa, Deia, Soller, Port de Soller, and Alcudia also feature in the luxury rental market, offering a selection of villas and apartments that appeal to high-end tourists seeking privacy and natural beauty.
Outlook on the Spanish Luxury Rental Market Including Mallorca
Spain’s luxury property market shows strong momentum in 2025, with price growth expectations around 6.3% and ongoing demand from high-net-worth individuals worldwide. Mallorca ranks among the premier luxury destinations alongside Marbella, Madrid, and Barcelona.
Attractive lifestyle factors, Golden Visa incentives for non-EU buyers investing over €500,000, and improved global connectivity are driving international interest in Spanish luxury rentals.
Conclusion: Can High-Yield Rentals Still Be Found in Mallorca?
Yes, high-yield rentals, especially luxury villas, are still accessible in Mallorca, though investors must be strategic. The island’s strong tourism industry, limited supply due to strict planning laws, and steady influx of international cash buyers maintain both rental demand and property value growth. Prime locations such as Palma and Puerto Andratx offer particularly promising opportunities for those targeting high-yield rental income within the Spanish luxury rental market.
These factors collectively underscore Mallorca as a robust investment strategy for those seeking profitable holiday rental properties in 2025 and beyond.
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