Balearic island appeal
Four islands – Mallorca, Ibiza, Menorca and Formentera - four reasons to bank on the Balearics this year
Easy to reach with miles of stunning coastlines, come the summer months the Balearics are top of many people’s ‘escape’ list. Between the four main islands of Mallorca, Ibiza, Menorca and Formentera, there’s great diversity on offer for both tourists and home hunters. What’s more, Partido Popular’s recent victory in the regional government polling means a cap on overseas second home purchases looks unlikely – for the next three years, at least.
Four reasons to invest in the Balearics
Property prices are on the up – with room to grow
For the past few years, the Balearics performed strongly yet in many ways remain relatively good value against certain other prime markets in southern Europe, says Kate Everett-Allen, Knight Frank’s Head of European Residential Research. Despite economic headwinds and higher borrowing costs, its appeal has remained strong: foreign buyers accounted for 34.3% of purchases in the Balearics in Q1 2023, compared to an average of 19.5% throughout Spain, according to Spain’s National Statistics Office. Also, according to Knight Frank’s Prime International Residential Index (PIRI) this year, which ranks prime locations by price growth, Ibiza was sixth highest at +12% over 2023, with Mallorca at seven percent.
Tempting taxation
Tax has never been the tail that wags the dog when a growing number of HNWIs consider the Balearic Islands (in fact it’s sometimes been a deterrent), yet a recent change might be an added inducement. The Balearic regional government overhauled its Wealth Tax rules in early 2024, including a change to the threshold at which the wealth tax applies, rising from €700,000 to €3 million. “This change puts it on more of an equal footing with Andalucia and Madrid, which both provide 100% tax-free relief,” Everett-Allen says.
Four season appeal
To catch up with Mallorca, Ibiza has also been focusing its efforts on evolving towards a year-round destination, according to Jack Harris, who oversees Knight Frank’s Ibiza market. He points to the popularity of international schools like Morna International College and Lycée Français International d’Ibiza. There are also increased winter flight options to the island from European cities, to help cater for a growing number of remote workers relocating on Spain’s popular digital nomad visa. Its applicants can apply for the Beckham Law tax regime (24% flat tax). “Ibiza now has global appeal. We’ve seen a noticeable increase in US buyers in recent months,” adds Harris.
Places to feel good
Whether it’s tennis, cycling or yoga, the Balearics have a reputation for world-class sport and wellness holidays. Rafael Nadal’s Tennis Academy is a big draw and Mallorca’s Tramuntana switchbacks attract around 200,000 road cyclists a year, including many who end up renting or buying a home there. The Mallorca 312 endurance race is the island’s answer to the Tour de France, Menorca has the Camí de Cavalls, a path that circles the island’s coast, and Ibiza has the most routes of all, according to the Balearics Tourist Board. Ibiza has firmly established its reputation as a wellness destination with yoga and meditation retreats. Perhaps this is why residents of Southern European countries will become the longest-lived, according to recent research by the University of Washington.
Three Balearic boltholes to consider
For a private retreat nestled in lush landscape, this historic finca in Manacor, southeast Mallorca, is hard to beat.
Near the birthplace of Rafael Nadal and offering the combination most requested by buyers of meticulous restoration with modern comforts, it has a three-bedroom main home, plus a two-bedroom pool house with scope to configure a wellness hub or a home office. A wine bodega, pizza oven surrounded by olive trees and an orchard complete the picture, making this tranquil estate both a hideaway and a place ideal for entertaining.
Located in the centre of Ibiza near Santa Gertrudis, this wonderful estate is perfectly situated to enjoy complete privacy or to dip into Ibiza Town or the beach clubs of the southwest coast.
Surrounded by lemon, orange and pomegranate trees, the nine-bedroom property is spread across three houses and a staff house, along with a private pool and tennis court. In traditional Ibicencan style with thick stone walls and wood beams, it’s ideal for year-round living.
3 bedroom townhouse North Menorca
New build is rare for Menorca, a highly protected island of sleepy villages, unspoilt coves and rural tranquillity that offers the ‘quiet luxury’ that many now seek.
Nevertheless, located in the seaside village of Fornells, in the north – within reach of Cuitadella or Mahon – this boutique development has 23 three-bedroom townhouses with large terraces and sea views, with completion of the site due in 2025.
For more properties in the Balearic Islands, please contact jack.harris@knightfrank.com
