Spain's Majorca real estate has been popular for several decades now, with many Europeans who have holidayed on the Spanish island deciding to buy a second home for holidays, a business, or for retirement.

Prices have risen on the island as buyers - mainly British and German - have moved in, but there are mixed signals coming from the property and tourist sectors, which could see a freeze in Majorca property inflation, and possibly even a dip in prices in the near future.

Official figures for Majorca holidays this year indicate an increase in tourist numbers by between five and seven per cent. And it is from the pool of holidaymakers where property sales often happen a few months later, as some visitors like the island so much they decide to look into buying an apartment or villa, with some even retiring to the island, or buying a business.

With the increase in visitor numbers, property demand should in theory be good.

Cheap Majorca flights have been running for some years now, and even with increased air tax in the UK, Majorca is easily accessible from more than a dozen airports in the UK for property owners and tourists alike, with a flight time of under two hours, allowing a market for weekend homes for overseas property buyers.

Although one of the earliest package holiday destinations with tour companies, Majorca has had new competition in recent years from the former Soviet Bloc countries in Eastern Europe, that are now able to offer cheap holidays to the British market, and for the property market countries like Croatia and Bulgaria have been able to offer apartments and villas at a fraction of the price Majorca can offer.

In response, the island has fought back showing it's not just the weather in Majorca that attracts property buyers, but a well established market with the infrastructure in place to protect overseas investors money.

Domestic Market

Any slow down or possible reversal of property prices could be welcomed by the local Majorca population.

They have seen the price of property in Majorca escalate, and many have been priced out of buying their own home.

This has led to some protests, with a demonstration against plans for more development in Majorca being held earlier in the year, with the belief that developers will destroy what is left of Majorca's open spaces, and rendering the map of Majorca unrecognisable in years to come.

With encouraging tourist figures, Majorca hasn't been resting on her laurels. This summer's SuperCup yachting event has seen the appointed of an experenced race organiser, in an attempt to make the event more high profile.

Similarly, neighbouring island Menorca is hosting a Classic Yachts weekend, with entrants expected from across Europe, with the event boosting occupancy for Majorca hotels.

Of the three Balearic Islands, Ibiza comes top for spending per tourist according to official recent statistics, reaching nearly a hundred Euros a day per tourist, with Majorca second, and Menorca third.

Current prices for property in Majorca include brand new 2 bedroom 2 bathroom apartments in Puerto Pollensa at 285,000 Euros, a country house with its own pool at 1,500,000 Euros, and a three bedroom three bathroom villa with its own pool at 900,000.