Ibiza Property Market

• Weighted average price in 2016: €3,452.28
• Weighted average price in 2025: €6,945.46
• Total price increase (Ibiza): +101.18%
• Compound annual growth rate (CAGR): 8.08%

• Gross rental yield: 4.27%

Based on data from Idealista, we used the average rental price per square metre for each month of 2024 to calculate a mean to use as an annual figure. We then computed an island-wide average using listing counts as of 27 July 2025 as weights, resulting in a rental average of €25.09/m²/month.

Using a weighted sales price of €7,055/m² - based on current listings across the same four municipalities - this gives a gross rental yield of 4.27%, calculated as (€25.09 × 12) ÷ €7,055.

Our gross yield of 4.27% for Ibiza is comparable but somewhat lower than the equivalent figure for Spain as a whole (4.85%), also calculated using data from Idealista, so the relative difference should be accurate. As another point of reference, as of 27 July 2025, Zoopla is quoting a gross rental yield for London of 4.9%. However, we must make the distinction that these are for long-term rentals - Idealista advertises for rental periods of one month or more.

The real opportunity for high rental returns in Ibiza, not surprisingly, lies in short-term lets, allowing investors to capitalise on the thriving tourist sector, where net rental returns of 8% or more are achievable.

Note: Our rental sample includes four Ibiza municipalities. We used current listing volumes for both rental and sales markets for these municipalities to calculate weighted averages. This ensures the gross yield figure reflects as accurately as possible the available properties across the island.

Looking Forward: 2025 and Beyond

In order to give an informed view on where the Ibiza property market is heading throughout the rest of 2025 and beyond, we make our assessment from three angles:

• Projecting current price trends forward
• Sentiment from Property Market Professionals
• Global Volatility Vs. Market Resilience

Projecting Current Price Trends Forward

Our figures are based on Idealista’s cleaned price data per square metre, adjusted using our own weighting model to reflect live listing volumes across Ibiza’s five main municipalities as of 5th August 2025.

Below we have calculated our own weighted average price per square metre for Ibiza for the last six months:

From the table above showing our Ibiza price movements between February and July 2025, we have calculated a compound monthly growth rate of 0.94%. This rate has been used to project price levels for the rest of 2025:

Sentiment from Property Market Professionals

The general consensus among established agencies in Ibiza points to price growth for 2025 close to double digits. Prestige Properties forecasts up to a 10% rise in values, while other firms report stable demand, increased negotiability, but no signs of systemic price declines. An average price increase of 10% for the year ties in closely with our own projection, based on a compound monthly growth rate of 0.94% calculated from price movements over the past six months. Annualised, this equates to an increase of 11.8%, which aligns closely with sentiment being reported on the ground when you take into account two notable factors: reported market behaviour of consolidation - for example, LET US Ibiza expect some sellers to reduce prices by 5–10% - and a significant decline in tourist numbers.

We need to acknowledge the significant drop in tourist numbers for the second half of 2025, with travel interest to Ibiza down 56% year-on-year according to Travel and Tour World (May 3, 2025). Yes, tourism is a key driver of the Ibiza property market, because most investors come to view the island as tourists. However, the buyer profile is wealthier, lifestyle-driven, and not part of the mass tourism segment. Any reduction in property prices following a decline in tourism typically comes with a significant time lag. Therefore, the dampening effect on prices is likely to be limited in the short term to medium term, and especially in core and luxury segments.

Global Volatility Vs. Market Resilience

Despite all signals pointing toward continued steady price growth for the second half of 2025, we need to recognise that the global climate this year is without doubt the most volatile in recent times. History tells us that Ibiza has a remarkable ability to recover from the most severe global shocks, from the global financial crisis of 2008 to the COVID pandemic. The structural strengths that underpin the wider regional market of the Balearics – luxury lifestyle buyers, high-net-worth investors, relatively low levels of leverage, a higher percentage of second-home buyers – are even more pronounced in Ibiza. The island's property market is also further strengthened by the uniquely glamorous brand of Ibiza, appealing to the jetsetter crowd, which is more insulated from economic downturn than the typical real estate investor.

However, the volatility of this year is like none ever seen before. The completely unorthodox approach of the current U.S. administration, where unrelated issues are bundled into the mix within geopolitical discussions, has undoubtedly added to the unpredictability facing global markets. A clear example is the recent shift in tone regarding the war in Ukraine. Frustrated by the lack of progress, on the 4th of August 2025, the U.S. abruptly threatened secondary tariffs on countries continuing to purchase oil from Russia – including India, China, and Brazil. These may ultimately prove to be negotiating tactics. Whether or not these threats succeed in curbing Russian oil sales, the net effect on global GDP is likely to be negative – either through reduced supply and rising oil prices, or through the imposition of secondary tariffs that introduce new inflationary pressures and dampen global demand.

By its very nature, volatility is unpredictable, so we really cannot say what global shocks lie ahead. But one thing most analysts will agree on is that even in the worst-case scenario, the effects on the global economy are unlikely to be anywhere near as severe as those following the global financial crisis – which saw the global economy contract by 0.1%. Following the GFC, the whole Balearic region, driven largely by sustained international demand, recovered remarkably quickly, with price growth returning by 2009. Within the region, Ibiza is the most luxurious submarket, giving it additional strength and resilience.