Why Property Investment In Ibiza Is Rocking

Much more than just a party island – property investments on the Spanish island of Ibiza are rocking. Laura Henderson reports

When enterprising farmer and artisan Joan Mari opened his drive-up bar on the outskirts of San Carlos in the north of Ibiza in 1954, little did he know that his makeshift hangout would become a bona fide symbol of la buena vida (good life) for the entire island. Mari’s pit stop paved the way for a humble dance hall and barbecue. Business began to prosper, even in those tentative first years in which European tourism was just spreading its holiday wings. Suffice to say the seeds of a Mediterranean chill-out utopia were sown and the island has never looked back.

Today, that same irrepressible freedom, colour and warmth that attracted those hippy pioneers continues to shape the island’s intimate yet cosmopolitan tourist evolution, one that happily embraces old-school values: vintage landscapes, pristine whitewashed towns and hotels rurales as much as the newer addition floaty fashion, uber-glam marinas, night clubs and super-size holiday villas.

Compact and bijou, the island squeezes a lot into its small surface. About half the landscape, particularly the rugged north east is covered with dense foliage, thick pine forests and olive, fig and fruit farms, while the coastline is characterised by dozens of cosy bays, walking trails, and out-of-the-way beaches. Northerly resorts such as Santa Eularia, Es Cana and Puerto de San Miguel are growing in popularity with families and jaded city dwellers seeking a quieter, slower paced getaway experience, while the livelier south around Ibiza Town, Playa d’en Bossa and the party-on Mecca of San Antonio have captured the imagination of a younger international crowd who don’t like to sit still.

Residential tourism, on what is the third-biggest and most westerly of the Balearic Islands, has made successful inroads into the holiday scene over the last decade, bringing a burgeoning pool of ‘quids in’ buyers with annual property price appreciation (pre-2008), booming in comparison to some neighbouring islands, achieving increases in the region of 100-400%. While the recession hasn’t had the same impact on sales volumes as the rest of Spain, high-end homes in the £2m+ range have nevertheless witnessed a degree of stagnation with a slight downward trend for less expensive properties. All told however, most agents are adopting a ‘business as usual’ approach, their upbeat mindset bolstered by strong fundamentals underpinning the market: namely a strong appeal with international buyers, a finite supply of quality property and tight building regulations. “The market in Ibiza hasn’t only kept going during the recession; it has evolved,” says property agent Roman Lang. “Before, the must have luxury properties were to be found in the south and south west. Now other areas are ‘bigging up’ their selling points – each offering scope with a diverse selection of property and price points to match.” Rental yields, with a footfall of over 2m visitors to the island every year are also delivering good returns, adds agent Petra Lavin: “Summer, when the majority of property owners let, is a busy period. A well appointed villa with pool can easily achieve £6,000 per week, potentially much more for a large, luxury property.” So where are the top places to invest on the White Isle? What should buyers be looking out for?

South/West
Brimming with luxury residences and stylish mansions along with more newly constructed turnkey apartments and villas, the south west of the island hits the spot for short-break investors and buy-to-letters with easy access to Ibiza Town, the marinas and the airport. “Many properties in the area boast stunning views of Ibiza old town D’Alt Vila,” confirms Lang, “plus you’re just minutes away from the cultural sites and leisure attractions of downtown.”

North/North West
Ibiza’s ‘up and coming’ hotspot, the sparsely populated northwest reaches (the island’s main agricultural region), boasts a contrasting landscape of rocky outcrops, canopied forests and small-scale beach resorts. The ideal hunting ground for larger rural estates, renovation projects with conversion potential and traditional village townhouses, property prices are a good 30-40% below those in the south. “Locations to watch include Portinatx, Puerto de San Miguel and Cala San Vicente,” confirms local agent Monica Balbin.

East/North East
A quieter stretch of the island marked by quaint villages, secluded bays and olive and fruit farms, a workaday local population means that there is life here year round. Key areas include San Carlos and San Juan. “Property here has excellent capital yield potential thanks to a new road system extending from the south,” confirms Balbin. “Larger plots are still available in quiet, rural settings, fuelling the belief that it’s less important where on the island you live these days.”

Buying in Ibiza

Buyers should allow for an additional 10% of the purchase price to cover property purchase costs, including solicitor’s and notary fees.

Once an offer is accepted by the owner a ¨compra-venta¨ (buy/sell) contract is signed between buyer and seller. This ties all parties in to the agreement and specifies a completion date.

Buyers are required to put down a 10% deposit. A final and binding contract is signed in the presence if a notary, at which time, title deeds and keys are handed to the new owner.