The average home price in Ibiza points to an “overheating” scenario, with levels higher than those seen during the property boom. That is one of the conclusions of the latest Tinsa report analyzing the performance of houses on the coast in 2022. According to the assessor, it is the only area in Spain that is sounding the alarm because of the values achieved, although A general increase of 4.2% compared to the previous year can be observed in all houses on the coast in the first quarter of the year.
The city of Ibiza, for example, already exceeds the 2008 maximum price by 20%, with a square meter value of 3,398 euros. In Santa Eulalia, the cost between January and March was 3,625, up 18% from 14 years ago. The situation is repeated in Sant Josep de sa Talia and Sant Antoni de Portmany, other towns on the island. The scenario is exacerbated when the holiday home market is analyzed in detail, because according to the expert, in Ibiza they are 300% more expensive than primary residences.
Usually, The Balearic Islands have the largest price differences between the two types of housing. Here, on average, a second home is worth 90% more than the community average, with the difference most often being between 30% and 60%. To buy an apartment building in Mallorca, a family has to pay an average of 5,000 euros per square meter, as in Ibiza and Formentera. The single-family homes become a real luxury, with figures that reach 10,000 euros.
In general, the coastal market has been reactivated in 2020 after the slowdown caused by the pandemic. Half of the areas have regained 2019 activity levels and houses on the islands have been revalued, exceeding the pre-pandemic price by 16%. In the first quarter of the year, the value of vacation rentals was average nationwide 2,400 euros per square meter in Spain.
The vast majority (86%) of the analyzed communities recorded annual increases between January and March, led by Nigrán in Pontevedra. In any case, it is not among the most expensive regions of Spain to concentrate San Sebastian, Barcelona and of course Ibiza. The most extreme are Berja in Almería, Nules and Almassora in Castellón or Carballo in A Coruña. In all these areas, the price is below 850 euros.
The report highlights that in the first few months of 2022 there has been an upward trend in sales and mortgage indicators. Nevertheless, With persistent inflation and falling growth expectations, there are first signs of a slowdown in the real estate market. Tinsa highlights the volume of new mortgage concessions, which “could reflect greater caution from both demand and financial institutions.”
Nonetheless, the slowdown doesn’t seem to be reflected in holiday homes yet located on the coast, because demand there continues to show a general dynamic in which sales from Spaniards predominate. With a 46% recovery over the past year, they’ve far surpassed pre-pandemic transaction levels. Demand from foreigners has also increased, albeit more slowly: 16% compared to 2020.
The coasts with increased business activity last year they are in Alicante and Malaga, followed by Barcelona, although the latter capital’s coastal market lags far behind the primary residence market. According to Tinsa, Valencia, the Balearic Islands and Cádiz also have coasts with a very active market.