Latest Knight Frank reports highlight growing demand
Mallorca’s prime residential market continues to outperform many of its European peers, while in Italy prime transaction volumes have more than doubled as international investors look to buy in the country. The insights come from Knight Frank’s Mallorca Residential Insight 2026 and its latest European Residential Signals.
Knight Frank found that foreign purchases in the Balearics fell 10% year-on-year in the second half of 2025, yet average foreign-buyer prices rose 7% to the highest level of any Spanish region. Prime prices are projected to increase by roughly 2% to 4% this year and steady, sustainable growth is forecast over the next few years.
Buyers are increasingly younger, with the median age of Knight Frank’s buyers on the island falling to 46 as remote workers relocate on the island for six months of the year. By nationality, Germans dominate, accounting for 59% of non-resident prime buyers. However, British, Spanish mainland and US buyers are also increasing their presence. Prime transactions remain concentrated between €5 million and €8 million, with strong demand for modernised fincas.
Italy sees 140% rise in completed deals
Meanwhile, its European Residential Signal, September 2026: Italy, found that Italy’s prime residential market surge saw a 140% rise in completed deals in the first eight months of the year compared with the same period in 2025, already exceeding its full-year 2025 transaction total.
The report suggests that Italy is increasingly attracting internationally mobile wealth, driven by the country’s flat-tax regime and wider lifestyle factors. Participation in the flat-tax regime has nearly doubled from around 3,000 individuals two years ago to around 5,000 today, while more than 60% of Knight Frank’s prime international enquiries are now primarily tax-driven.
Knight Frank also found that buyer demand is extending beyond traditional hotspots such as Tuscany and the Lakes into major cities such as Rome, Milan, Liguria and Venice as buyers move from holiday home purchases to longer-term homes. As well as UK buyers, who account for around half of 2025’s unique completed transactions, the company said it has seen increased interest from buyers in the US, Switzerland, France, India and the Netherlands.
