The ‘Ibiza rental crisis’ has gathered momentum over the last 18 months with prices now at an all time high. The local press has been full of horror stories such as a picture of a lady filling her suitcase with the headline “No home, goodbye Ibiza”.
The property boom of 10 years ago saw many new residential blocks go up providing better living standards and increasing the all year population. It was also relatively easy to buy a property as the banks were lending money but inevitably land prices rocketed and many developers ceased trading. The classic boom and bust.
Ibiza being a small island there is a limited amount of land so unless they start sanctioning high rise blocks (which they won’t) there is also limited living space especially as since the crash and change of government there has been very little construction work, in fact it’s come to a complete standstill.
Demand is high and supply is low and it doesn’t take an economics genius to figure out what happens next. Whether you think landlords are greedy or just maximising we live in a free market. If someone is prepared to pay a high price then that is the market price. We don’t live in a communist state and the market dictates the price not the owner but it’s also worth remembering that not all owners are capitalist pigs, some ask reasonable prices.
Let’s also throw Airbnb into the equation. It’s changed the rules as apartment owners can comfortably get more for their property in 3 or 4 months than renting it all year round. Ibiza is first and foremost a tourist destination after all (and shouldn’t tourists take priority? But that’s a whole different argument).
Technically it’s illegal to rent out apartments in residential blocks to tourists however the promised clamp down by the authorities hasn’t happened.
The simple fact of the matter (and this may upset the traditionalists who think that the island should live in a time warp) is that Ibiza is at the top of its game and people are prepared to pay a premium to be a part of that. Rental prices have caught up and are now surging ahead fuelled by a high demand by those wanting to live in ‘paradise’.
Ibiza is now the most expensive place in the whole of Spain to rent an apartment putting us ahead of Madrid and Barcelona. Great news for landlords and those who bit the bullet and bought their own place but very bad news for the not-very-well-paid civil servants and those wanting an affordable life on the most famous 220 square mile island in the world.
So unless theres a catastrophic event or the government start financing affordable housing or they decide to seriously crack down on illegal apartment rentals the situation isn’t going to change anytime soon however there is some good news.
There’s affordable housing all over Spain, for example you can get a decent 2 bedroom apartment in Benidorm or Malaga or Murcia or Estepona or Almería or Salou and many other towns for 500-700 euros PCM. They are close to major cities and there also plenty of jobs.
But it’s not Ibiza and thats exactly the problem. Love it or hate it, everyone wants a piece of the White Isle because it’s amazing and gives you a quality of life found in very few places. Unlike in previous years that now comes at a high price.