Ibiza House Prices Surge

Ibiza House Prices Surge

Good news for home owners on the White Isle but bad news for those desperate to get on the ladder. A new report by urbanData Analytics (uDA) reveals that property prices in Ibiza are now 3 times higher than the national average and almost double than the rest of the Balearic Islands.

The study, based on properties registered in the last quarter of 2018, revealed that the average price in Ibiza was 4616 EUR per square metre compared to 2683 EUR for the Balearic Islands and 1679 EUR for the whole of Spain.

The municipality of Ibiza Town has the highest price of 5218 EUR per square metre followed by Sant Joan with 5058 EUR and Santa Eulalia at 4515 EUR.  Sant Josep’s average is 4399 EUR and San Antonio’s is 3892 EUR per square metre.

In Mallorca, the municipality of Calvia has the highest value at 3462 EUR per square metre followed by Andratx at 3351 EUR.  The average price of Palma is estimated at 2596 EUR per square metre.

The statistics highlight that the housing problem in Ibiza is much more serious than in the rest of the Balearic Islands.

The uDA report also shows the increase in Balearic house prices in 2018 when comparing first quarter to last quarter. Palma grew by 7.7%, Calvia by 6.1% and Ibiza by a massive 16.7%.

The analysis also revealed the big difference to owning your own home depending on the municipality in which you choose to live. For example, to own a residence in Calvià it will cost you 13.6 years of average gross household income, this decreases to 8.9 years for Palma, 6.1 years in Manacor and 4.7 in Inca. The Balearic average is 10.9 years of gross income but in Ibiza this increases to 15 years. 

For 2019 the Balearics is expected to grow another 10% in value whereas the national average is forecast to be 3.7%

The rising house prices in some Balearic municipalities also means the product is less attractive as an investment as it is increasingly difficult to obtain a significant return if it goes to the rental market. Interestingly for rentals the report states that for Inca in Mallorca you can expect a 6.1% annual return yet in Ibiza this drops to only 3.9%.

This forecast, however, is not shared by everyone including the representatives of the real estate sector in the islands. Luis Martin, The president of the association of promoters argues that “customers are fed up” with the prices of the archipelago which is causing a decline in demand. The president of the real estate agents’ association, José María Mir, also considers that rental prices are peaking.

Martin expects that the price of housing in sales will grow, at best, by around 5%, while Mir predicts that rents will stand still or rise by 2% at best.

Source: Diario de Ibiza

Ibiza to Switzerland: The Yin and Yang of Tourism

Fun on the white stuff in Verbier!

I’m back on the White Isle after another fantastic ski week in Switzerland. Last year it was the German speaking Zermatt so this time 5 friends and I decided to sample Verbier on the French side.  What’s always interesting when I’m visiting new places is to see how they react to tourism, how they treat tourists and how tourism interacts with their way of life. Ultimately I then compare it back to Ibiza where the resident/tourist conundrum has been a fraught relationship lately.

Every destination has its pro’s and con’s and Switzerland is one of those calm places where everything works. Trains run on time, hot water comes out of the hot tap and nobody seems overly phased by anything (which isn’t surprising with a minimum wage of around 3000 EUR per month). It’s a mature destination comfortable in its own skin that understands it’s role in the tourism deal. They provide a good, professional service and in return the customer pays a premium, it’s not cheap but it’s not obscenely expensive either, although there is that option for the wealthy and the blingtastic wannabes.

What’s interesting about Verbier is that many tourists stay in private rental apartments (a concept that is outlawed in the Balearics), there’s a smattering of hotels such as the luxurious W Hotel but most people that I spoke to were staying, like us, in a private apartment either through an agent or a website such as airbnb or booking.com.  We paid £2500 for 1 week, so for 6 of us it was a little over £400 per person, a very reasonable price for one of Europe’s premier ski resorts.  The quality was OK and it ticked all the boxes without being luxury, you get what you pay for at the end of the day.

The resort town of Verbier itself is charming, the lift system is good linking the 4 valleys, skiing is as challenging as you want it to be with a good selection of runs and amazing vistas. I would strongly recommend taking the cable car up to the top of Mont Fort, where at 3330m above sea level you get the sensational alpine view of the iconic Matterhorn and Mont Blanc, a worthwhile selfie if ever there was one. Skiing back down the steep, bumpy black afterwards is not for the faint hearted so you may decide to go back the way you came. The mountain restaurants we tried (Dahu, Chez Dany, Namaste) were excellent without being mind-blowing (Chez Vrony in Zermatt will take some beating).

The ‘Après’ in Le Rouge, T-Bar and Farinet was fun if a little subdued compared to other resorts (St Anton, Saalbach) with a surprising amount of Brits (including the usual Tarquins and Henriettas using Daddy’s credit card) mingling in with the locals and seasonnaires.  The overriding atmosphere was of a comfortable, laid back resort with nice people enjoying a well earned break.

So how do other destinations such as Switzerland reconcile themselves with tourism yet Ibiza and Mallorca seem to struggle?  I omit the other Balearic Islands on purpose, in fact Formentera and Switzerland could be twins in opposites seasons and Menorca doesn’t seem to worry too much either way.

What Switzerland and other destinations seem to have that the Balearics doesn’t is an acceptance that tourism brings compromise yet they set clear rules so lives aren’t ruined and everyone is expected to follow the law. They aren’t selling their soul, they are embracing the concept and running with it.

Ibiza and Mallorca have shown over the last couple of years that there is an unresolved, perpetual, internal battle with tourism. We want the money and prosperity that it brings but we aren’t able to cope with the complications that inevitable come with it, even if it’s only for half of the year. Some residents, fueled by social media, aren’t prepared to compromise even when most local employment revolves around tourism. We want only a certain ‘type’ of tourism even if we don’t have the infrastructure to support it. Lamentably tourism now seems to be the fall guy for some Spanish resorts that wouldn’t exist without it.

There’s no magic formula though, I’m sure the Swiss are attracted to Ibiza because it’s nothing like their country and vice versa. Switzerland excels in relaxation and wellness whereas Ibiza leads the world in pure hedonism but the Balearics can learn a lot from places like Switzerland. Both are steeped in natural beauty and attract a cosmopolitan crowd with spending power but mismanagement at the highest level means that as beautiful as our Islands are, we are still not reaching the heights that we truly deserve.