Still riding the rave

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Ibiza Old Town at dusk

Although Spain slipped back into recession in April as its economy contracted for the second quarter in a row, that worrying development will have passed virtually unnoticed on the island of Ibiza. Life is still good for the 112,000 inhabitants of the Balearic Island. Some 75 per cent of the population get their income directly or indirectly from tourism and last year Ibiza airport saw more passengers pass through it than ever before. More to the point, this is Ibiza, the paradise island where hippy culture melts imperceptibly into the clubbing scene. Nobody worries on Ibiza.

Ibiza’s post-war development reads like an improbably glamorous soap series in which the super-rich rub shoulders with artists, musicians and itinerant youth. Controversy has followed more recently with the screening of the documentary, Ibiza Uncovered, which portrayed young hedonists fuelled by drink, drugs and sex. Yet the Savills associate in Ibiza, Cathy Ouwehand, claims this portrayal was a savage distortion of the truth.

“That kind of behaviour is confined to one part of San Antonio,” she says. “The real Ibiza, where VIPs spend €1,500 for a table at a club like Pacha for an evening, is far more upmarket.”

There is, anyway, more to Ibiza than its nightlife. Apart from its 56 beaches, with their aquamarine bays, there are sleepy provincial towns, Venetian ruins and Ibiza Town itself, which is a Unesco World Heritage Site.

As for property, even though prices dropped by 8 per cent in 2011, homes in Ibiza are currently 179.7 per cent more expensive than the national average, according to the Kyero National Index, and estate agents consider now to be a good time to buy. “Properties that are well located, with good views, are currently retaining their value,” says Ouwehand. “Demand for properties over €1m is strong because demand outstrips stock in this price bracket.”

The authorities have helped to make location – usually meaning a sea view – the all-important factor that defines price. Recent legislation means it is difficult to build a single home on a plot of more than 450 sq metres, so people are unable to build new homes in the best spots. Instead, they buy existing homes, knock them down and build again on the footprint.

Simeon Friend, who has lived on Ibiza for 12 years, has found building a property on the island can be a chastening experience. “When I first moved here I renovated a 450-year-old finca and that went well,” he says. “However, my next project, building a brand new home, became wrapped up in legal wrangling that went on for four years before any work could begin. I would advise others to get the best legal advice before attempting to build here and to be prepared to pay hefty fees.”

In the rental market, some of the most expensive properties let for €25,000 a week, while a two-bedroom apartment should bring in between €1,500 and €2,000 a week in the busiest months of July and August. Knight Frank claims that a yield of between 8 per cent and 10 per cent is realistic.

Although the island is comparatively small, its landscape is varied. You get more land for your money in the centre of the island and in the north you will find some of the wealthiest inhabitants, who have no need to be near an airport, still living the hippy dream.

The view from a five-bedroom home a short drive from the beaches on the north-east of the island, on sale for €12.5m

Knight Frank is selling a recently completed five-bedroom property a short drive from the north-east beaches, set in 10 hectares, for €12.5m. It has sea views from its terraces, a pool and an outdoor dining room, with sails for shade. In the south-east of the island Savills is selling a six-bedroom villa with a pool in Es Cubells. South-facing, the villa has views of the sun rising and the moon setting across the sea to Formentera – an important factor in Ibiza. It is for sale for €5.5m. Towards the opposite end of the market BuyinIbiza.com has for sale a fifth-floor, three-bedroom, furnished apartment with air-conditioning in Ibiza Town, close to Marina Botafoch for €450,000.

Ibiza’s charms as a tourist island are obvious and Friend, who runs an events company, which is staging shows by Elton John and Sting this summer, believes it is also a good place from which to do business. “It provides a unique opportunity to combine work with a wonderfully relaxed lifestyle,” he says. “Major international players come to the island regularly so it’s ideal for networking.”

Friend and his wife, Libby, have brought up their daughters, Josephine, nine, and Florence, seven, on Ibiza and they have been impressed with the education system. Both girls go to the French international school so they are becoming trilingual in English, French and Spanish.

However, working from Ibiza can also present problems. “You cannot assume that having a phone or internet connection will be fixed as quickly as it would be in the UK,” he says. “Airlines’ schedules can also be unpredictable. It’s straightforward getting to, say, Switzerland in summer but it may be rather more difficult in winter.”

According to Knight Frank, Ibiza is currently popular with buyers from the Netherlands, Germany and Russia. Among buyers from the UK, retirees like the island because they are of the generation that remembers when Joni Mitchell and Mick Jagger first made it the world capital of boho-chic. The water sports and the nightlife also mean they have no difficulty getting their children and grandchildren to visit.

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Buying guide

Pros

● Wide variety of sports activities

● Laid-back lifestyle

● Good investment opportunities

Cons

● Vulnerability to the whims of airlines

● Only one golf course

● Difficult to get a good restaurant table in August

What you can buy for ...

€100,000 A one-bedroom studio apartment in most towns

€1m A three-bedroom contemporary villa with a pool and distant sea views

Contacts

www.knightfrank.com

www.oaibiza.com

www.buyinibiza.com