Apr 18, 2023 | Ibiza Blog | 0 comments

Ibiza Registers Highest Property Prices In Spain

Ibiza Blog | 0 comments

Written by Dan Kirwan

A recent study by the Spanish College Of Property Registers has revealed that 36% of all property purchased in the Balearic islands was funded with Black Money. The term “Black Money” is used to describe cash sales and financial transactions that do not involve bank loans or mortgages. Furthermore, the statistics also found that non-national buyers accounted for 83% of the black money sales, the majority of them originating from Europe. Germany reflected 44% of the property buyers, followed by the UK at 10.4% and France at 4.7%. The average purchasing power of the local Spanish market was recorded at 234,000 last year, while the non-national average was 367,000, indicating that foreigners pay more and mortgage less for a property. This compares to an average of 123,000 in The Canary Islands, a third less than the red-hot Balearic market, which has risen to the highest property prices in Spain.

In figures released in March, municipalities in Ibiza featured in the top six most expensive places to buy in Spain. Sant Joseph de Sa Talia, the home parish of the Matutes Group, recorded the most costly land at 6.295 sqm. Santa Eularia del Rio was second at 6.224, an increase of 18%, Evissia, home to Ibiza Town, was fifth at 5,359, followed by Sant Antoni de Portmany in sixth at 5,333 a square meter. Sant Antoni reflected the most significant percentage rise in property prices at 38%, underlining its growing appeal to property investors. When you consider that Barcelona and Madrid were down the table in tenth and eleventh position respectively, at 3,935 a square meter, it makes the Ibiza figures all the more remarkable on an island with a total land area of 571.6Km sq.

The Germans were the first nationality to recognise the potential of real estate in Ibiza when they began to buy property for peanuts back in the 60s and ’70s. Due to their nomadic nature, the international Hippie family rented property rather than buying it. Local Ibicenco families would rent out their fincas and land and move into Ibiza town and purchase apartments where they could live near all the amenities and tourist jobs as farming was a subsistence existence back then and sadly remains that way today with many young Spanish nationals abandoning the land for city education and employment. The Dutch wave of property investment began in the latter years of the 90s when property was still affordable but less cheap than in the 80s.

Gone are the family hotels, replaced by adult-only luxury concepts

As a tourist who has visited and worked on the island since 1996, it has been fascinating to witness its metamorphosis from a Spanish backwater into a trendy destination. Regarding property prices, Ibiza has always been recession-proof; even during the great recession of 2008, prices held firm. In mainland Spain, they have long regarded “the islands” and their inhabitants as a little different. Gone are the family hotels, replaced by adult-only luxury concepts and brands driven by the Matutes group. Ibiza enjoys a growing reputation as an international business hub due to its central location, openness and transport links. It will continue to grow, and I don’t see anything halting that progress in the foreseeable future. I always believed that the island never changes; its magic and energy are still there. It’s the people and their actions that have changed.

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