Ibiza property market: Stable prices thanks to international demand

With its Mediterranean flair, mild climate and large swathes of unspoilt countryside, Ibiza is one of the most exclusive regions in the whole of Spain. The real estate market on the third largest Balearic island has been stable for many years, with prices consistently high for premium holiday properties. “With the arrival of the pandemic and emergence of remote working, owning a beautiful and safe home has become far more important for many people. Demand for residential and holiday properties remains very high as a result, especially in the luxury segment. On Ibiza, the interest in modern apartments and rural residences in good and medium locations is also steady. In fact, in 2020 the average price achieved at sale was 29 percent higher than in the previous year,” reveals Florian Fischer, Managing Partner of Engel & Völkers Ibiza.

Hamburg - (Image source: Engel & Völkers Ibiza)

Top prices for high-end homes around Ibiza Town and in south of the island

Ibiza Town, the south and the southwest rank among the most exclusive regions on the island. These areas command the highest prices, driven up by high excess demand. In and around Ibiza Town, luxury villas with direct waterfront views or even direct access to the sea are particularly sought after. The starting price for properties in prime locations was 4 million euros in 2020. Buyers looking for modern apartments near the old town or next to the marina paid entry-level prices of 8,000 euros per square metre. In the south and southwest, brand new contemporary homes and large Mediterranean-style villas directly on the coast with views of the neighbouring island of Formentera are among the highest priced properties on Ibiza. Prices last year for particularly outstanding properties in prime locations started at 3.8 million euros, with modern terraced houses selling for upwards of 960,000 euros. “The arrival of a more flexible work culture means that many of our clients are looking to spend more time on the island and are increasingly using their second home to work remotely. Features like a terrace, an extra room in urban apartments to accommodate a home office, and a reliable Internet connection have thus become extremely important for many buyers,” says Florian Fischer.

High prices for first and second homes in all regions on the island

The west of Ibiza also offers a diverse range of properties, from luxury villas on the coast to historic finca estates further inland, through to modern apartments and terraced houses in all price categories. In premium locations, buyers can expect starting prices of 3.5 million euros for premium villas and finca estates, while prices for exclusive apartments started at 6,000 euros per square metre in 2020. Fascinating countryside can be found in the north of the island. Buyers drawn by the authentic traditional side of Ibiza and looking for a beautiful rustic property will find what they are looking for here. Compared to the high prices in the south, properties in the north have more moderate price tags and the density of homes is also much lower. “Strict building regulations will continue to make sure that the number of properties remains limited in the future, therefore preserving the authentic beauty of the region,” says Florian Fischer. Last year, traditional finca estates sold here for prices starting at 3.5 million euros.

In the east of the island, luxury villas, modern apartments, authentic finca estates and country houses in the quieter areas around Santa Eulalia are all highly desirable. With an improved local infrastructure, thanks to the completion of the main road to Santa Eulalia last year, property prices in this region are expected to rise in 2021. Starting prices for top-end villas in very good locations sold for upwards of 3.2 million euros in 2020. By contrast, Engel & Völkers registered prices starting from 4,500 euros per square metre for exclusive apartments.

Spaniards are largest buyer group, followed by clients from German-speaking world

The island continues to be a magnet for clients from across Europe, despite the pandemic. Buyers from German-speaking countries make up the second largest buyer group, after wealthy Spaniards. They are followed by prospective buyers from Italy, France, the UK, Switzerland and the Benelux countries. In addition, Engel & Völkers has also registered a rise in demand from prospective buyers from non-EU countries and regions, including the USA and Asia. Individual motivations for buying are equally varied, ranging from a desire to own a peaceful and family-friendly second home for private use, to the prospect of profitable returns on investment generated by rental income.

Outlook: Prices expected to remain stable in 2021 

Engel & Völkers is forecasting a continuation of the current price trends and an increase in the number of transactions in 2021. Ibiza has once again proven to be a safe haven for real estate in the past year. “Dynamic buyer activity over recent months and a continuous stream of requests for digital property viewings have given us cause for optimism. We have many clients who can hardly wait to view their favourite houses and apartments in person. We are therefore very confident that buyers and sellers will proceed with their real estate plans and close transactions as soon as unrestricted travel is possible again,” Florian Fischer concludes. 

The Engel & Völkers Market Report for Ibiza 2020/2021 can be found in full here.

In addition, a selection of exclusive properties currently listed with Engel & Völkers Ibiza can be found here.

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