If someone still had hopes that in the near future, or at least in the medium term, the situation with extremely expensive housing in Ibiza and Formentera will improve. Such people can finally give up all hope for such changes.
Omar Garcia, Director of Real estate at CaixaBank Banking Group in the Balearic Islands, warns: «The demand for real estate on these islands will not change. There is nothing to indicate that prices may decline in the near future. The reverse outcome is most likely — prices will only grow. What is the reason? The growth of demand from foreign citizens, whose purchasing power far exceeds the ability of local buyers, and prices in this region are more affordable for them than in their own countries».
Garcia was one of the participants of the round table «Lack of housing — a brake on the economic development of Ibiza and Formentera», held at Club Diario de Ibiza. At this event, he made an analysis of the housing crisis in the region and its economic consequences, especially noticeable in the shortage of fresh labor throughout 2022.
The event was also attended by such persons as Jeffrey Fernandez, representative of the Association of Real Estate Agents of Spain and API Balears Society in Ibiza and Formentera, Fernando Fernandez, Secretary General of Pitiusa UGT, as well as Maria Angel Marie, Secretary General of Pimeef, a company engaged in consulting and protecting the interests of small and médium-sized businesses. The event was opened by the Minister of Housing of the Balearic Islands Josep Marie Ribas.
Garcia also pointed out that currently the real estate market of the Pityuz Islands is extremely active and dynamic. The annual growth in the number of sales in the region amounted to 32% and about half of the objects sold came from foreign buyers. Thus, out of 14,000 real estate transactions made in the Balearic Islands in 2021, 7,200 were made by foreigners.
The director of CaixaBank believes that such demand cannot be stopped, since it is due to Spain's very presence in the European Union, which makes the countries completely open to international migration. Moreover, the influx of wealthy foreigners, according to Garcia, is only in the early stages of recovery. The potential for the growth of such demand is huge, including due to the fact that the Balearic Islands are not only an excellent resort destination, but also extremely cheap at the same time. At least for foreign buyers.
If for many Spaniards the cost of a typical house in Ibiza can often be almost unattainable, then for a large number of European buyers, for example Dutch and Germans, such prices are more than acceptable. Often they are noticeably lower than a similar offer in their own countries. Thus, the cost per square meter of living space, for example in Germany, on average ranges between EUR 6,400 and 11,400. At the same time, on the Pitius Islands, a similar offer will cost from EUR 4,700 to 7,600.