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