“The island numbers among the hotspots where the cosmopolitan clientele especially like to purchase a holiday home. Particularly the demand in the top segment over €1,000,000 has dramatically increased.” says Florian Fischer, executive partner of Engel & Völkers on Ibiza. “Interested buyers seeking inexpensive property on Ibiza today have unfortunately come too late,” continues Fischer.
The prices for premium real estate on the Balearic Islands have been drastically increasing since late 2012. Engel & Völkers registered price increases in the industry of up to five per cent in 2013. Due to the growing sales prices as well as increased number of transactions in the upper price range, both Engel & Völkers shops on Ibiza reported sales profits of around 20 per cent in 2013 compared to the previous year. With this great sales result, Engel & Völkers are guaranteed their position on the island as the market leader for the premium segment.
Florian Fischer primarily attributes the reasons for the real estate boom to the global popularity and the attraction of the Ibiza brand: According to Florian Fischer, most buyers are less concerned with fiscal or economic aspects. “The people are mainly seeking out a holiday home on Ibiza due to the unique lifestyle and incomparable charm of the island,” Florian Fischer describes the advantages the Mediterranean island has in the eyes of many of his clients.
Magnet for prominent celebrities and cosmopolitans
Ibiza has been inspiring artists and creative individuals from all over the world for many decades, and is considered the paragon of lifestyle, luxury and a world renowned club scene. The combination of premium climate, astonishing beaches, the traditional Mediterranean lifestyle and its world famous economic and cosmopolitan atmosphere ensures continuously increasing holiday figures (+5 per cent in 2013 as opposed to 2012) and has turned the island into one of the trendiest locations for a holiday home. “Discretion is key for us, whereby the island is especially highly popular among famous personalities from the worlds of business, culture, media and sports,” reveals Florian Fischer. According to him, the opportunity to invest in quality property now is still favourable, despite the increasing prices: “The good properties are becoming scarcer as the prices continue to grow. Buyers seeking out a safe money investment with growth potential should not be bargain hunting to begin with.”
Ibiza lifestyle is the most important economic motive of international property buyers
Among the coveted areas are Ibiza City, Es Cubells, Cala Jondal, Talamanca as well as Santa Gertrudis and San Carlos further inland. Traditional fincas and modern villas, typical to the island, are equally as sought after as luxurious apartments and penthouses. In the very best properties, the entry prices amount to around €2,000,000. If everything is right in terms of location and amenities, connoisseur prices sometimes reach the two-digit millions. “The most important motive for purchasing a property on Ibiza remains the relaxed island life combined with world-class entertainment, spectacular beaches and myriad leisure activities. The sales price thus takes the back-burner for many interested buyers,” says Florian Fischer. However, buyers would not accept any over-the-top prices. “Because interested buyers from abroad are very well informed of the local real estate market,” states real estate expert Florian Fischer.
Clients from the German-speaking world dominate the holiday real estate market, followed by buyers from Benelux, Great Britain, Italy and France as well as Russia and other non-EU countries. In 2013, the average age of buyers of Engel & Völkers’ properties was 47 years, making Ibiza a relatively young locale.
Improved flight connections and more berths for super yachts
Countless re-openings of top-class restaurants, hotels and beach clubs such as the Lío, Nikki Beach and the Harbour Club ensure that the brand continues to become more attractive for the global clientele. Crucial infrastructural measures also provide new incentives. That way, improved flight frequencies and connections especially enliven the secondary residence market. Private air traffic has also gained traction over the past year by 19 per cent, and placed Ibiza among the Top 4 European airports in terms of private air traffic.
In the yachting industry as well, the island is further positioning itself as a leader in the Mediterranean. Ibiza is gaining new momentum with the restructuring of the former ferry harbour and was thus able to create seven of the coveted berths for super yachts of up to 110 metres in length.
Outlook: Market upturn is also continuing in 2014
Florian Fischer also positively reviews the potential development of the real estate market: “We are very optimistic for the year 2014 and support this view of the constant strength of the Ibiza brand, which is not promoted only locally but globally, and which is supported by many prominent individuals. Strict building regulations also ensure that the authenticity of rather large portions of the island remains a crucial, unique characteristic and top properties are an increasingly in-demand asset.”
You will find the full market report by Engel & Völkers Ibiza here at https://www.engelvoelkers.com/wp-content/uploads/2014/03/EV-Ibiza-Market-Report-2014-small.pdf