Demand for historic, inland homes is driving the latest housing boom in Ibiza—Spain’s party-loving island in the Mediterranean that’s better known for attracting celebrities and business tycoons to rent seaside villas or bask in their mega yachts along the coast.
Prices for renting or buying a property on the island have long been a pricey proposition, with demand high and inventory low. Since the start of the pandemic, however, this interest has grown significantly, along with prices. Waterfront properties are perennially popular and glamourised in the global press, but the residential market on the inner part of the island away from the sea has underpinned this recent spike, according to Jack Harris, a partner in the International Residential Department at the London-based firm Knight Frank.
“The coastal areas are more touristic, and as a result, they’re more transient and seasonal, with a fluctuating population that peaks in summer,” he said. “The centre of the island is a year-round destination with a variety of villages that bustle with life that include festivals, Christmas markets, art galleries, restaurants and more.”
Located off Spain’s eastern coast and one of the main Balearic islands, Ibiza may rank as the world’s most legendary party destination. It’s a culture that’s epitomised by the electronic dance music scene and nightclubs such as Pacha and Hi, where all-night bashes are the norm and tables command up to $50,000. According to Serena Cook, the founder of the luxury lifestyle company Deliciously Sorted Ibiza and a local resident, Ibiza has always been a hub for creatives.
Cook added that Ibiza’s mild winters, which see plenty of sunny days, have attracted home buyers to move there full time. People also come for the free-spirited vibe
“It’s a free-spirited place where anything goes, and there’s a melting pot of different nationalities,” she said. “In the last half-decade or so, it has gotten more and more luxury-focused.”
Booming Inland Towns
Santa Gertrudis is at the epicentre of inland living and has numerous notable restaurants and cafes as well as the international children’s school Morna International College, where transplants and locals enrol their children. Other towns include Sant Joan de Labritja and Sant Josep de sa Talaia.
In contrast to the contemporary villas typically near or on the water, these inland areas stand out for their fincas—either traditional homes dating to the 18th and 19th centuries that are constructed of mud and stone or new properties built in the classic finca style but reinterpreted for modern-day living. Harris and Cook said that the latter are hard to come by because the local government is stringent about protecting the landscape and doesn’t grant permits easily.
Fincas feature views of hills and olive trees instead of the ocean, and over the last three years, Harris said, the market for them has appreciated in the double digits.
“The advent of remote working is in large part behind this rise,” he said. “People are drawn to the serenity of the countryside, the amount of outdoor space you can get and the fact that you’re surrounded by nature.”
Given Ibiza’s relatively small size, the coast from any of these inland towns is less than a 30-minute drive away.
“If you feel like going snorkelling one day, you can choose the beach with the calmest water, and if windsurfing is what you’re after, you’re never too far from the beach with the best wind,” Harris said.
Local real estate firms also report an increase in sales of inland properties. It’s a local boom that’s defying a global slowdown that’s impacted high-end markets from London to Berlin in the face of rising interest rates and economic uncertainty.
Javier Medina, an agency manager at the real estate firm John Taylor Ibiza, said that his company has seen “soaring sales” in the past two years. “We had an increase of 30% in the first half of 2023 compared with 2022,” he said.
Meanwhile, Cook said her business “has gone through the roof.”
“We’ve jumped by 20% and sold five countryside homes last year for US$5 million or more,” she said. Inland homeowners include buyers from the U.S., especially New Yorkers and tech entrepreneurs from the West Coast, Europeans from countries such as England, France and the Netherlands. Several notable examples include the French designer Isabel Marant and the New York art gallery owner Howard Greenberg.
In following the trend, Cook herself sold her coastal home in 2021 and moved to a countryside property because she wanted more outdoor space and a garden to grow her own produce. Cook is the founder of Ibiza Preservation, a nonprofit that protects the local environment. The group recently reported that organic farming in Ibiza has jumped 20% in the last 10 years, with many inland homeowners growing their own fruits and vegetables.
Not Exactly a Bargain
A finca’s lack of sea views doesn’t mean bargain pricing, Harris said.
“With pricing high, your money shall certainly go further inland in comparison with the coast,” he said. “That said, properties historically hold their value no matter where they are.”
A countryside finca that’s in good condition and has four bedrooms, open views, a swimming pool, pool house, multiple outdoor terraces and possibly some olive trees, costs at least US$3.5 million, Harris said. Coastal properties of the same caliber are more than US$5 million and can be higher if they offer especially dramatic views.
The architecture firm Blakstad Ibiza is behind the most sought-after and priciest inland homes. Founded by Rolf Blackstad in the 1960s, it’s now run by his son, also named Rolf. The company refurbishes rundown fincas and also builds new ones, the younger Blakstad said, with prices averaging between US$6 million to US$18 million for a property.
“We had a half dozen or so projects a year pre-Covid, but now work on a dozen,” he said.
Blakstad’s fincas typically span between 5,000 and 6,000 square feet and feature sustainably sourced timber, bedrooms with outdoor showers, solar energy, large doors that open to outdoor spaces such as terraces and gardens that may blend into farmland.
As an example, Knight Frank is currently offering a renovated turnkey Blakstad-designed finca in the village of San Rafael that costs close to US$6.5 million and is set on a hillside. Surrounded by pine forests and Mediterranean plants, it has five bedrooms spread over a main and guest house, five baths, an abundance of outdoor space including a landscaped garden and a swimming pool.
“Ibiza’s parties will forever be iconic and appeal to tourists,” Harris said. “Look a little deeper, however, into the middle of the island, and you’ll discover why so many people are choosing to make it their home.”
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The Republican nominee says it would help bring down home prices, though these buyers account for a fraction of U.S. home sales
Former President Donald Trump said he would ban undocumented immigrants from obtaining home mortgages, a move he indicated would help ease home prices even though these buyers account for a tiny fraction of U.S. home sales.
Home loans to undocumented people living in the U.S. are legal but they aren’t especially common. Between 5,000 and 6,000 mortgages of this kind were issued last year, according to estimates from researchers at the Urban Institute in Washington.
Overall, lenders issued more than 3.4 million mortgages to all home purchasers in 2023, federal government data show.
Trump, the Republican presidential nominee, made his comments Thursday during a policy speech to the Economic Club of New York in Manhattan.
Housing remains a top economic issue for voters during this presidential election. Rent and home prices grew at historic rates during the pandemic and mortgage rates climbed to levels not seen in more than two decades. A July Wall Street Journal poll showed that voters rank housing as their second-biggest inflation concern after groceries.
Both major candidates for the 2024 presidential election have made appeals to voters on housing during recent campaign stops, though the issue has so far featured more prominently in Vice President Kamala Harris ’s campaign.
Trump has blamed immigrants for many of the nation’s woes, including crime and unemployment. Now, he is pointing to immigrants as a cause of the nation’s housing-affordability crisis. Yet some affordable-housing advocates and real-estate professionals said Trump’s mortgage proposal would fail to bring relief to priced-out home buyers.
“It’s unfortunate that given the significant housing affordability crisis that is widely acknowledged across most partisan lines, we are arguing about a minuscule segment of the market,” said David Dworkin, president of the National Housing Conference, an affordable-housing advocacy group.
Gary Acosta, chief executive of the National Association of Hispanic Real Estate Professionals, a trade organization, said, “It’s just another effort to vilify immigrants and to continue to scapegoat them for any issues that we have here in the United States.”
A Trump campaign spokeswoman didn’t immediately respond to a request for comment.
Undocumented immigrants in the U.S. can obtain an obscure type of mortgage designed for taxpayers without Social Security numbers, most of whom are Hispanic. The passage of the USA Patriot Act of 2001 allowed banks to use identification numbers from the Internal Revenue Service as an alternative to Social Security, extending a number of financial services to people without legal status for the first time.
Mortgage loans for undocumented immigrants are typically higher interest and borrowers include legal residents who have undocumented spouses, Acosta said. Lenders include regional credit unions and community-development financial institutions.
In his speech, Trump said that “the flood” of undocumented immigrants is driving up housing costs. “That’s why my plan will ban mortgages for illegal aliens,” he said.
Trump didn’t elaborate on how he would enact a ban on such loans.
Though mortgages for undocumented people living in the U.S. are relatively rare, residential real-estate purchases by foreign nationals are big business , especially in expensive coastal cities such as New York and Los Angeles. These sales have declined in recent years, however.
Close to half of foreign purchases are made by people residing abroad, while the other half are made by recent immigrants or residents on nonimmigrant visas, according to an annual survey by the National Association of Realtors. Many affluent foreigners buy U.S. homes with cash instead of obtaining mortgage financing.
In his Thursday speech, which focused mostly on other economic matters such as energy and taxation, Trump proposed other measures to bring down housing costs, including cutting regulations for builders and allowing more building on federal land. Similar ideas appeared in the housing policy outline Harris released in August .
The former president has spoken on housing-related issues in speeches at other recent campaign stops, including in Michigan last month, where he touted his administration’s 2020 overturn of a policy that had encouraged cities to reduce racial segregation .
“I keep the suburbs safe,” Trump said. “I stopped low-income towers from rising right alongside of their house. And I’m keeping the illegal aliens away from the suburbs.”
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