We lived in Mallorca for several years, and yes, most things are more expensive than the mainland on the islands. The Balearics are beautiful, BUT, for us, we found that an island just gets smaller and smaller the longer you live there and we went a bit stir crazy! Menorca is MUCH smaller than Mallorca. Also, we found local people not too friendly - quite a bit of resentment towards foreigners, and they love to reply in Mallorquin (dialect of Catalan) when you do your best to speak Castellano Spanish. Each to their own, of course, just letting you know about our experience.
Residents of the islands used to get 33% discount on travel to/from the mainland. Don't know if it's still the same.
Rent before you buy.