The real estate sector in Ibiza and Formentera is experiencing a rapid acceleration and overheating, with a record-breaking 2,007 home sales and purchases between January and November 2022, surpassing the annual records of recent years, including the peak sales year of 2017 with 2,001 transactions. Even during the construction boom, similar figures were not reached, with 1,688 and 1,799 home sales in 2007 and 2008, respectively. This represents a 42.7% increase in transactions compared to just one year ago.
The economic and social situation is conducive to the fact that sales have soared in the last year. Firstly, in most cases it is more profitable to take out a mortgage (despite rising interest rates) than to rent, especially for wage earners. But in addition, many of the buyers are foreigners for whom the current prices are quite affordable and who invest their money either to later rent out (to tourists) the newly purchased properties or to resell them in a market that does not seem to have reached its peak.
In fact, there are quite a few who decide to redirect their capital, considering that they will make more profit in the brick market than if they keep their bank deposits at a standstill, where interest rates are either zero or very low or (in all cases) below the current galloping inflation rate.
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