Ibiza Property Real Estate Market Report 2Q 2017


IBIZA Prime Real Estate Market
1SEM 2017 Property Report

Summary
7th August 2017

Dear Customers, Clients and Friends,

The semester of the year confirms that the season is growing with more off season visitors than ever!

This is good news in general for the island.

We are forecasting another good year for tourism, and though July and August are unlikely to grow much more than last year, mid season months are expected to continue to grow significantly.

An extended season with less pressure concentrated in July and August will lead to a more sustainable and and higher quality offer which will benefit visitors and residents alike.

Prices are still seeing upward pressure as scant offer, a rigid planning permission environment and tighter legislation create a bottleneck for supply.

Average real estate prices continue to rise sharply and now are some 50% higher than a few years ago.

Prime Real Estate has been seeing a more gradual increase and we would estimate that prices have grown by some 10-15% in 2016 , and are some 30-35% higher than 2013. Please note Prime did not fall very much, if at all, during the crisis.

Home sales are consolidating the previous years levels, at a touch under 2,000 transactions in 2016.

Housing stock available for sale hovers around the 1,700 units, though Prime Real Estate on offer has grown a little in recent months. There appears to be more rotation taking place in the mid market.

We would expect prices in Prime Real Estate to consolidate at current levels.

We do not expect prices to fall, just to to take a breather before continuing its ascent, albeit at a more moderate pace.

Land to develop also continues to be very restrictive, and those with actual real planning permission have increased considerably in value. Those without permits have not subsequently dropped in price, but rather remain stagnant on expectations that eventually restrictions will be become somewhat more lenient in the future.

Demand still far exceeds supply, and probably will do so for a while, but prices do need to consolidate at current levels.

So, not a bad time to be quietly house hunting!

Clive Heathcote
Houses in Ibiza

*Please note the figures we use can vary over time, as sources revise numbers, and sometimes are guesstimates, but the trends are there.
Our sources are IBESTAT, Ministerio de Fomento, INE, Federacion Hostelera de Ibiza y Formentera, Exceltur and Idealista.

2016 – 17
Airline Passengers

2016 closed with a record amount of airline passengers. an increase of close to 15%

2017 is seeing increase in low season travel. Numbers are expected to consolidate this year.

Passengers include inbound and outbound. Also included are resident passengers which are estimated to be some 20% of total.

Passengers have been steadily increasing in recent years. Figures Include inbound and outbound.
There has been an increase of 31 % since 2011.

Ibiza covers more than 60 destinations in season. The island has increased destinations off season, currently offering off season direct flights to London,Paris, Milan, Geneva, Amsterdam and Eindhoven.

We expect numbers should start to consolidate at these levels.


2011- 2016
Passengers Arrivals
Nationalities
Inbound only

Sharp increases all around in the mature markets

Notably this season continues to see very strong growth in the Dutch market.

The Spanish market looks to consolidate recent highs, on the back of better domestic economic growth.

In addition the Swiss and Belgian markets has also been seeing good growth in recent years.

Asians are starting to visit the island.

The island has experienced a sharp increase in tourists growing by over 70% between 2010 and 2016
This represents some 9% increase vs 2015.

The island is probably close to full capacity in peak season and seems to be consolidating these levels.
Low and Mid season visitors has grown significantly and the latest data for September & October shows records.

A large increase in family oriented visitors in recent years is significantly changing the mix and the island is becoming focused on also offering adequate products for this market.

Following a sharp increase in recent years 2016 has closed pretty much flat on the year.

Volumes are consolidating at these levels.

Most transaction are in secondary homes.

Prime real estate is seeing the strongest growth in sales with mostly foreign, cash buyers.

The UK and the Benelux lead the market with good growth from Swiss and American buyers.

2017
Ibiza
Property prices and stock

Ibiza Housing stock available on Internet has increased over 6% since June.

Most sales are taking place in the apartment segment. Prices have increased again by some 15% overall
in the past 2 quarters.

The amount of stock in the Ibiza prime market has increased somewhat and prices in the +3mm segment has seen prices increases by 7%.

Total housing stock on the island is some 65,000 units.

2017
Ibiza
Property prices and stock

Average prices per square metre in Ibiza are amongst the highest in Spain. (over twice the national average)

Average prices continue to increase and have now increased some 50% in the past 4 years.

Prices on the island of Ibiza vary enormously and there are averages based on listed prices for all products.

Prices has seen sharp increases in the past 2 years and we expect to see some consolidation at these levels.

The island of Ibiza has some 571 km2 , with over 200 km of coastline, and over 50 beaches.
Topologically diverse, the highest elevation point is Sa Talaia with 475 m.

Total population has increased by some 2000 vs 2015 and there are some 35,000 foreigners (over 25%).
There are some 65,000 registered housing units on the island.

The island generates over € 3 billion in tourist expenditure.

75% of the economy is related to tourism.
Unemployment stands at some 7000 or 5% of the population.