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The Ibiza Real Estate Market: SummaryIbiza real estate was one of the strongest perform-ing Spanish property markets of 2011.

According to the statistics, the dip in average prices evident up to the middle of 2011 began to reverse in the second half of 2011, with signs of an increase in property value in the final quarter of the year. Ibiza property ended Q4 at an aver-age price of €3,026 per m2.

Through 2011 the best luxury Ibiza villas were keenly sought after by foreign buyers, particular-ly from the Netherlands, United Kingdom, France, Italy and Germany.

Growing tourism arrivals throughout the year – surpassing 2010 levels - brought a new wave of interest from potential buyers drawn to Ibiza’s

year-round comfortable climate, leisure activities, nightlife and the Balearic Island’s excellent record of safety and security.

These factors contributed to the Q3 and Q4 2011 upward trend in demand for luxury properties as investors sought to take advantage of the fact that owners of quality properties remained open to a degree of negotiation.

In the market as a whole, individual months presented a more mixed picture with the number of sales highest in January and May. The majority of properties sold were in urban areas such as Eivissa, the Ibiza capital. Making up only a small proportion of overall transactions, rural property sales remained fairly consistent at about 12% of the total amount of property transactions throughout the year.

While overall property sales have slowed since their peak in 2006 / 2007, there is still strong de-mand for high quality properties at the exclusive end of the market. Global internet searches for luxury Ibiza villas peaked during the summer months and maintained a healthy rate of interest throughout the rest of the year. Search queries for more general Ibiza property were much lower. Globally, the majority of foreign-based searches for Ibiza villas were made from the Netherlands, United Kingdom and Italy.

Ibiza Property Asking PricesAccording to Spanish internet property portal, Kyero, asking prices in Ibiza dropped from an av-erage of €755,000 per property to €687,000. This

IBIZA REAl ESTATE MARKET REpoRT Q3 & Q4, 2011

“The higher end of the Ibiza property market remained stable through-out 2011 and there appears to be ever increasing interest in luxury properties in prime locations across the island’’

Figure 1: Property transfers (merchanting) – Balearic Islands 2011Source: National Institute of Statistics (ine.es)

Figure 2: Searches for “Ibiza villa” compared with “Ibiza property”Source: Google Trends

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shows a slight downward trend in 2011 for Ibiza compared with a more stable – yet much lower – average for asking prices across all of Spain.

At the more exclusive end of the market, Kyero reported that by the end of the fourth quarter 2011, 4 bedroom properties in Ibiza had an aver-age asking price of €1,150,000 (30.4% higher than the Balearic Islands average) and 5 bedroom prop-erties had an average asking price of €1,662,000 (20% higher than for the Balearic region and 180% higher than the Spanish average for properties of the same size).

Ibiza Property Average Sales PricesAverage property sales prices for Ibiza began climbing slightly throughout Q3 and Q4 2011. While the Spanish average property prices con-tinued a slight downward trend, Ibiza property sales monitored by Spanish portal sites Fotocasa and Idealista both showed a gradual upward trend, with Idealista’s end of year data showing an improvement in sales prices, closing the year at €3,026 per m2.

Since Q1 2011, the sales prices of Ibiza properties have been gradually increasing, returning to the values recorded in the middle of 2010. This sug-gests there was an upsurge in property trading in late 2010 and the start of 2011, levelling out the market as recognition grew amongst investors that Ibiza properties represent a great investment. The influx of tourism (discussed below) brought Ibiza to the attention of more lifestyle investors seeking quality properties that are well-located with access to leisure activities, beautiful coast-lines and good international travel routes.

“We expect the demand for luxury Ibiza properties to continue to grow in 2012, as more people rea-lise the investment potential of the island and take advantage of the great properties available across the island,” said, Alix Bond of lucas Fox Ibiza.

Ibiza Rental MarketThroughout 2011, Ibiza saw stronger demand for short-term rental properties than was the case in 2010. The season is gradually getting longer – some villa owners reported high occupancy rates from April through to october. luxury villas in the Cala Jondal and Es Cubells areas remained the most popular amongst international visitors.The best villas rent out for in excess of €10.000 per week in the high season.

A strong indicator of short-term rental demand, Ibiza airport arrivals throughout 2011 were 12% higher than visitor arrivals in 2010 (to the end of November 2011), with the usual tourist surge during the summer months. However, even in November (traditionally one of the year’s quietest months for tourism), arrivals were some 4% higher than in 2010, confirming the stronger interest in Ibiza amongst international travellers throughout the year.

Foreign Investment InterestAcross Spain, foreign property investment in the third quarter 2011 increased 24.7% over Q3 2010 levels. Ibiza and the Balearic Islands region were one of the top areas for foreign property invest-ment with the Spanish Ministry of public Transac-tions recording 516 property purchases by foreign investors across the Balearic Islands in Q3 2011.

lucas Fox has seen sustained interest in Ibiza properties from key market segments across the globe. For Q3 and Q4, 2011, the majority of for-eign interest in Ibiza properties came from the UK, France, Switzerland the Netherlands, the United States and Germany.

Lucas Fox Analysis and Predictions for 2012

“The higher end of the Ibiza property market remained stable throughout 2011 and there ap-pears to be ever increasing interest in high-end properties in prime locations across the island.” Alexander Vaughan, Director of Lucas Fox com-mented. “As predicted in our market review dated May 2011 the large proportion of international property owners and buyers at the higher end of the Ibiza market has meant that the island has not been affected by the economic slowdown that has impacted on some parts of Spain. The increasing number of international visitors and the growing recognition that investing in Ibiza property is a good long term investment looks set to ensure that the luxury Ibiza property market will continue to thrive. The change of local Government has had little impact so far on planning laws which should also mean that land with building licences continues to attract strong interest and offer good investment opportunities”.

Figure 3: Average asking prices Ibiza vs Spain 2011Source: Kyero.com

Figure 5: Ibiza airport arrivals 2011Source: AENA

Figure 6: Foreign interest in Lucas Fox Ibiza properties Q3 & Q4 2011Source: Lucas Fox website analytics

Figure 4: Average Ibiza property sales prices 2011Source: Idealista.com, Fotocasa.es

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About the Lucas Fox Market ReportsYou can keep receiving up-to-date market reports from the lucas Fox International properties team. Subscribe to future updates at our website or bookmark our blog for the latest news on the Ibiza real estate market. For questions about Ibiza real estate, please contact one of our sales staff at +34 933 562 989.

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Anthony LeatonMarketing Manager

Stijn TeeuwenDirector

Alex VaughanDirector

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