Ibiza Real Estate Market Perspectives January 2022

IBIZA NEWS - The Real Deal

Hope you are all keeping well!

What is happening here on the magical island of Ibiza?
So many different, exciting and interesting developments are taking shape and forging the island forward.

In Ibiza, nothing is as constant as change.

The tolerant, inclusive and irreverent vibe is firmly rooted in its history, and while music and dance are a large part of the DNA, so is the mystical, the esoteric and the spiritual.

The resident colony is colorful, eclectic, open minded and cosmopolitan with a growing number of high net worth individuals and families establishing Ibiza as a home base, seeking a differential, high quality lifestyle alternative.

Every season, the island jolts into gear and welcomes over 3 million visitors.
Attracted by the natural beauty of the island, over 300 days of sunshine, pristine beaches, hundreds of parties at the iconic clubs, a huge variety of top restaurants offering diverse, culinary delights, many cool bars and cool hotels, beach clubs, events, wellness and mindfulness retreats and and numerous sports activities.

So many choices and so different!

There is something here for everybody.

Throw in growing demand for holiday homes, institutional investor appetite, compelling rental yields, consolidation of Ibiza as a premium luxury destination, improving infrastructures and a vibrant year round resident community, all within a 2 hour flight from most European capitals, and you can understand why the unprecedented demand.

Supply is constrained by strict planning laws, cumbersome building permissions, lengthy bureaucracy and limited space.

Property prices in Ibiza have started to move up, after a four year market consolidation.

KEY TAKEAWAYS 2021

Some Numbers on Ibiza

Let us look at some numbers.

The total inventory on the island is around 100,000 homes with a population of 150,000.

Tourist arrivals mainly in the summer season account for over 3 million visitors from all over the world which spend around 3 billion euros every year.

Currently, some 3,500 homes are listed for sale, where some 1,500 are sold on an average year. That is a take up ratio of 43%. Pretty much a sellers market!

Home sales increased a whopping 45% in the past 12 months, and average prices moved up 15%.

Ibiza is one of the most expensive real estate markets in Spain, with prices often over the €10,000 per m2 for a premium property.

ibiza real estate forecasts 2022

What will the real estate market look like in 2022?

We think the good tailwinds will prevail and that means prices propel higher!

There is a limited amount of supply of high end properties on the market and new developments are relatively limited.

The amount of high net worth individuals seeking to buy and live on the island, at least part time, will continue to grow.

Ibiza as a luxury destination will consolidate and with a steady flow of visitors and growing demand for vacation rentals, properties offer compelling yields.

Prices will continue to increase, quality supply will start to dry up, demand will remain robust, international high net worth families will continue to establish themselves on the island, diversity will expand and the infrastructures are gradually improving.

Building costs have increased with some materials rising as much as 30% and execution periods have been extended on the back of supply chain constraints, this trend will continue.

All this adds to the value of existing homes.

Talamanca- new development

Sounds like a virtuous cycle in the making!

For those looking for a place to live, a special place for a holiday home or just as a good investment, do your due diligence but do not hesitate too long.