A Year That Ends Well for Ibiza Property Sales
The property market in Ibiza is on a definite upward trend at the end of a year of unprecedented adversity and pessimism in other sectors of industry. Almost all businesses continue to suffer the long term effects of COVID 19 which has challenged the very core of enterprise worldwide. Here, on this small island, however, the picture is looking good for investment in Real Estate and the situation seems to show further signs of improvement in the coming year.
After travel restrictions caused a massive drop in the tourist trade this summer, visitors to Spain and the Balearic islands are set to soar next year. Even before the vaccine has been made widely available, tour operators are reporting an increase in bookings for 2021 in excess of 30%. A situation that is highly unusual during the, traditionally slow, pre-Christmas period. Real estate agents are reporting similarly heightened sales of holiday properties suggesting that investors are clamouring to obtain a second home in the sun which they can enjoy once the threat of the virus has passed.
British buyers are also looking to invest before the beginning of a year that will, inevitably add complication and further cost implications to the process. Interest rates on mortgages are at an all time low and for those who can afford to buy property there has never been a better time. Depleted flight programmes during 2020 has made it more difficult to view houses meaning that only the serious buyers are showing interest and, although websites appear to be generating fewer inquiries, these requests for information are being converted into sales in a much higher proportion of cases. Another, increasingly popular, option is to own property, not physically, but via investment funds and real estate companies.
These cooperatives buy into larger projects or a number of construction sites and are looking to expand their investment in Spain due to the country’s, historically, good returns. Buying shares in such companies may not be the best option for the private buyer but it does free the investor of concerns over administration and legalities. A primary consideration is the contribution investment funds make to the property markets of the countries where they choose to buy. Since the confirmation of Brexit many real estate companies have abandoned the uncertainty of the UK and shifted to safer countries such as Spain.
Ibiza’s housing market has always been robust and will remain so due to rising prices, driven by demand, which will continue to outstrip supply. The island attracts high-end investors from overseas and has a construction industry able to cater to the luxury market. Building restrictions only serve to make property ownership more precious resulting in a lucrative long term investment attractive to the most discerning global customers. No one could have predicted the affect of 2020 on the property market but, as the year draws to a close, renewed optimism is a welcome antidote to the bleakness of the virus and a source of hope for the full recovery of the island’s economy in 2021.
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