Ibiza Real Estate Market Insights October 2022

IBIZA NEWS - The Real Deal

Hope you are all keeping well!

As a historic season finally winds down, it is a good time to sit back and do a little thinking into what has happened, whats going on and where we seem to be heading. 

The islands coffers have been replenished, the real estate market has been busier than ever and prices mostly at all time highs. 

Hotels, restaurants and clubs have all had a phenomenal season and the increase prices across the board have been absorbed by the market and tourist expenditure will reach an all time high.

 Home buyers have been active and institutional demand remains robust and scarcity is the governing issue. 

A new territorial plan is being elaborated, taxes are increasing and planning permissions are expected to tighten. Throw in geopolitical uncertainty,  challenging economic developments and higher inflation and we have a recipe for a cooling of the market.

 Ibiza has proven to be resilient in the past, but our feeling is that rather than any significant fall in prices, we will see a consolidation at around these levels and a slower market meaning a fall in transactions. 

History has taught us that these period tend to be the better moments to be buying and probably with a little more time to deliberate and shop around. 

Expect to see some trophy assets change hands in coming quarters!

 

 

Whats happening?

pacha group on the block

Trilantic partners, lead owners of a 90% of the iconic Pacha Group is looking to sell its stake in the restaurant, club and hotel group.

The funds bought 90% the company in 2017 for €270 mm, the founding family Urgell remains a 10% shareholder.

Pacha has struggled since the acquisition ,especially during the pandemic, selling the Pacha Hotel in a sale and leaseback with the Reuben Brothers, significantly increasing its debt and reducing personnel. The group requested and obtained special state financing worth €28mm.

It expanded operations in to Mykonos with its Destino & Lio brands and a small boutique hotel in Formentera.

This year saw a sharp bounce back, according to the company it expects some €50 mm in EBITDA  this year.

Stay tuned!

 

A new territorial plan is being hatched

A new territorial plan will be passed in January 2023 which will bring changes to the actual status quo. 

This will affect aspects of land use, typology, segregation, zoning and planning as as such housing, build ability and of course tourism.

We will be analyzing the potential impact as it materializes and will keep you posted

 

TRANSACTION TAXES ON PROPERTY TO INCREASE

The Impuesto sobre Transmisiones Patrimoniales, ITP, is set tp increase in 2023 for transaction over €1,000,000 from 11.5% to 12%.

It also includes a new tranche for transactions over € 2,000,000 will see the ITP tax at 13%

On the other hand transactions under €270,000 will see the ITP tax reduced from 8% to 4%

With the ITP tax representing over 14% of total budget revenues, it hard to expect them to really make any move against non resident home purchases, which make up the bulk.

Again elections in May 2023 may see some changes there if the opposition  get into government. 

 

Matutes group buys the iconic Privilege cluB

Privilege Ibiza

After years of dispute between the majoirty shareholder with 55% Echaniz and the Matutes group with 45%, the courts have finally enabled the Matutes group to buy out Echaniz stake reportedly for some € 20 mm.

The iconic club will remain closed this season and undergo a full refurbishment with the aim to open next season.

Another important addition to the Matutes portfolio. 

Let´s see what they come up with!

  

 

universal beach hotels in formentera

Univeral Beach Hotels Formentera

.The Mallorcan based hotel group will open its first hotel outside Mallorca. The boutique hotel is expected to open in Formentera in June 2023 as part of its €40mm expansion plan.

The 31 large suites with a private pool or Jacuzzi will be build along sustainable guidelines using natural materials and wood.

The hotel will have a pool with a bar an outdoor gym and is located close to the pristine beaches of Formentera

 

the budgets

the 2023 local budgets are being approved

Ibiza Budgets in an electoral year

Tis the time of the year… made a little spicier by municipal and insular election in May 2023.

What is clear across the board is that budgets will increase and while most have big remnants left over from previous budgets the administrative appetite is insatiable.

Sant Josep has just approved it budget of close to €48 mm, up 16%. Sant Antoni is proposing an increase of 5% to € 31,5 mm, while Santa Eularia presents a budget of of 52 mm up 10%.

We are awaiting the budgets for Ibiza town, Sant Joan and the Consell d’ Eivissa and expect to see increase in all those as well.

We will break them down for you as they get offically approved and published

 

CONSELL approves agrotourism finca room rentals

A New Laws

The Consell de Ibiza has passed a law that enables fincas to rent out up to 3 rooms and 6 guests for short term stays.

The idea is to help finca & farm owners supplement their income with holiday rentals.

The property owners of these fincas will have to apply for the touristic license, and buy and capacity (per beds), notwithstanding that for the moment there is a moratorium imposed by the autonomous government theGovern in Palma.

The reasoning behind the moratorium is to establish criteria for the tourism model for the Balearics going forward and understand its need in terms of capacity, sustainability and  distribution. 

The moratorium is intended for 4 years while studies and evaluations are carried out.

Worth looking into as it will add value to the property.

What else?

six senses villas & residences for sale

Six Senses Residences & Villas

This is a unique opportunity to own one of a handful of six- to seven-bedroom First Line Villas just steps away from the secluded shorefront of Xarraca Bay.

 
The First Line Villas offer up to  1,000 square meters of living space in addition to rooftop terraces with double bay views.
The additional outdoor entertainment area is ideal for hosting get-togethers from sunrise to sunset and each has a private half-Olympic sized pool overlooking the sea. 

Using locally sourced materials, the villas combine a traditional finca aesthetic with all the modern comforts.
The North and South Village Residences are masterfully designed with both scale and flow in mind.
The layouts offer between four and six bedrooms and between 270 square meters and 630 square meters of interior living space.The interiors are a contemporary interpretation of local design influences, using sustainable, natural materials, wood and micro terrazzo stone.

Outside, the intimate terraces and lush gardens offer views out to the sea. Each residence has its own pool and, in some cases, a private rooftop ideal for entertaining.

The North and South Mansions are also available to rent for larger families and groups and have full use of the hotel amenities

 

NEW PROJECTS FOR IBIZA TOWN

Mercat Vell and Sa Peixeria reforms approved !

The city hall of Ibiza has finally approved the refurbishment and reformation of the old market and the fish market.

This will change significantly the landscape of the Marina and inject a new breath into the Marina area.

The fish market will be reconverted with fresh fish stalls, delicatessens and food market stands whilethe nearby Mercat Nou will offer fruit and vegetables and local produce.

Total investment will be €3.8 mm and is expected to be completed  in18 months.

Private jet traffic jumps to all time highs

First half figure for 2022 show a 13% increase in private flights coming into Ibiza airport.

We saw 9,542 operations in and out of the island and in July the latest figures show one flight in four is private. 

This season looks like we will break another record! 

Lets check some numbers

strong recovery in tourist arrivals

Tourist Arrivals Strong  Rebound 

The island economy depends almost entirely on tourism,  

We follow this indicator as a gauge for the underlying strength of the real estate market

The season has been very  strong and is expected to exceed 2019 figures. Good news for the island!

Listed offered prices continue to move up

Residential Home Prices  

 

Listed offered prices across all price points continue to rise steadily and are reaching all time highs for the average market price.

Demand is robust and scarcity is still a large factor behind these increases, though we would expect some easing on current economic climate and uncertainties going forward.

 

Building Permits steam ahead

Home sales are powering ahead.

2Q 22 home sales came in very strong and we expect the trend to continue though slowing somewhat towards year end.

The market is brisk and demand is fairly strong with a good take up.

 

keep your eye on ...

tribulations at the ibiza club nautico

The Ibiza Yacht Club  Club Náutico Ibiza (CNI) insists that it has presented the “most advantageous” offer to obtain the provisional concession for the management of its facilities by the Balearic Islands Port Authority (APB). In response to its competitor, Puertos y Litorales Sostenibles, the CNI defends that its proposal is “the only one that meets the criteria of the tender specifications” and denies that it has tried to exert “pressure” on the APB by denouncing “the serious irregularities” of your competitor’s bid in this tender. The CNI reiterates that its competitor’s offer should be “excluded” and warns once again that, if chosen, it would mean turning the marina in the port of Ibiza into “the most expensive on the entire island, contravening the spirit and the content of the bidding documents.

 

a second new private hospital in Ibiza?

Work has started, albeit in the midst of a hard lobby against it  lead by the owners of the incumbent private hospital in Ibiza El Rosario.

The new hospital will be located just outside the village of Jesús

next issue DECEMBER 2022

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