Ibiza Housing Crisis Explained

Summer is around the corner. With it comes plenty of challenges and one that gets more headlines than most is the Ibiza housing crisis – there isn’t anywhere to rent at a reasonable price.

There are 2 main profiles of tenants, those who require short term rental i.e. 6 months (usually over summer) and those who want an annual rent for a minimum of 12 months. In the not too distant past it was relatively easily to find a summer apartment, in 2005 my agency alone had over 100 summer units for rent whereas today we have precisely zero..

The simple reason why summer only apartments have all but disappeared is the high demand from people wanting to live in Ibiza all year round and the prices landlords can now charge for a 12 month let. It’s been getting more difficult every year, high demand has gradually pushed up prices to such a level that landlords can now maximise by renting for 12 months and receive an excellent income.

The rising population of the island over the last 20 years has moved the Ibiza economy forward so many can afford to live here all year rather than for a transient 6 months then needing to go off-island for work in the winter. Ibiza offers a lifestyle that is unmatched by many other places with quiet winters and busy summers, not forgetting the famous 300 days of sunshine per year.

This obviously doesn’t help those coming to the island desperate to find a place to live for summer but this is the reality of the situation. It’s a basic supply and demand scenario. Low supply, high demand of apartments is pushing up prices for the few apartments there are to untenable levels.

Personally speaking, as an agent I haven’t had a reasonably priced apartment offered to me for a long time, agents don’t get the units like before as there’s such a long queue for apartments that most owners have plenty of tenant options without needing an agent.

A recent survey showed that the majority of tenants in Ibiza Town are paying 700-1300 EUR per calendar month for their home. This may sound cheap but historical contracts can only be raised by inflation every year. It’s now difficult to find a decent dwelling for this price and things aren’t getting any easier however after a stagnant few years new apartment blocks are being built again.

The Balearic government has talked about capping the price of rental properties but this will never happen in a free market although local licensing and/or taxation could be a way of control, something has to give sooner or later. Social housing has also been mooted but the local authorities do a lot of talking but don’t seem to want to get involved as this opens up a hornets nets.

So, unfortunately, don’t expect things to get much better any time soon. My advice is look to rent a room or share a 12 month let to spread the spiralling costs or if possible try and buy. As you can see from above, it’s a good investment with solid returns.