IBIZAREAL ESTATE MARKET Q1 & Q2 2013

Maxim RettichDirector Lucas Fox Costa Brava

www.lucasfox.comIBIZA REAL ESTATE MARKET Q1 & Q2 2013

IBIZA REAL ESTATE MARKET: OVERVIEW

• Ibiza property prices are at more than double the Spanish average

• Lucas Fox has registered unusually high levels of sales enquiries in the first two quarters of 2013

• 2013 is on course to be another record-breaking year for both sales & rentals

• Ibiza sales prices remain steady, in strong contrast to the Spanish average

• The demographic of clients is changing with many more young European buyers in the 30 to 40 year age group

• Growing demand from non-European clients from Russia, China and India for

both buying and renting

IBIZA REAL ESTATE MARKET: SUMMARY

The summer months in Ibiza are expected to see some aggressive

competition for the most desirable properties on the market. While property transactions have been steady since the start of 2013, airport arrivals in the spring months have increased on 2012 figures, and data shows that global interest in renting and buying on Ibiza is higher than in 2012, which itself was a record-breaking year.

Ibiza’s changing reputation from being solely the preserve of party-goers to being recognized as a top luxury Mediterranean destination has further consolidated in 2013 with the continuing success of high-end restaurants and clubs such as Lìo and the opening of Ushuaia Tower, Destino by Pacha, and Sacca.

The island is increasingly attracting international travellers looking for a Mediterranean paradise with crystal clear waters, untouched natural wilderness, high levels of safety and security, luxury boutiques and fine dining. Yachting marinas, golf courses, horse-riding and pristine beaches provide a full complement of activities and recreational opportunities alongside the internationally renowned nightlife and exquisite restaurant culture.

It seems that buying or renting a home on Ibiza was on everyone’s New Year’s resolution list this year…from the start of the year, people have been keen to find out more about the best properties in the most exclusive locations on the island.

More international hotel groups are looking at Ibiza as a potential destination for their businesses and we believe that the coming years will see another rise in the level of the island’s tourism sector with more and more focus on high end tourism.

www.lucasfox.comIBIZA REAL ESTATE MARKET Q1 & Q2 2013

Property Sales Transactions: Ibiza and Spain: 2012 – 2013 / Source: ine.es

Global internet search interest for “Ibiza villas” 2012 – June 2013Source: Google Trends

“So far in 2013 we have seen much higher levels of buyer interest than in 2012 – which was our busiest year to date”, comments Maxim Rettich, Director of Lucas Fox Ibiza. “This is partly down to our growing reputation and position on the island. Also the new law that will grant residency permits to those interested in investing in high-end properties is particularly attractive to Russian and Chinese buyers who have been keeping a close eye on newly listed villas and apartment developments on the island.”

PROPERTY TRANSACTIONS

The Ibiza property market is driven by a separate set of factors than other local Spanish property markets, although it does follow some national trends. Overall, the past twelve months have seen a steadier level of trading in

Ibiza than observed nationally. Both Ibiza - and Spain more widely - saw a rise in property transactions at the end of last year as sale/purchases aimed at avoiding end of year taxes are transacted, and these sales tend to continue showing up in January data. Apart from this seasonal bump, property sales in Ibiza have followed the normal pattern, slowing in the winter months.

The continued level of sales activity is reflected in global Google search trends for Ibiza villas. As is typically the case, search interest in Ibiza peaks in the summer months and tends to wane between October and the end of the year. What has been interesting in 2013 is the sudden rise in interest from the very start of the year.

“It seems that buying or renting a home on Ibiza was on everyone’s New Year’s

resolution list this year,” adds Rettich “While we did see a drop in clients actually viewing properties in January and February, this wasn’t matched with the level of enquiries. From the start of the year, people have been keen to find out more about the best properties in the most exclusive locations on the island.”

IBIZA PROPERTY SALES PRICES

Ibiza property prices have remained mostly steady for the past year, with a slight dip in the 2012/3 winter months after a rise in averages in the capital Eivissa last year.

As at the end of June 2013, average property prices in Eivissa held at €2,851 per square metre according to web property portal, Idealista. The steadiness of Ibiza’s property prices is in strong contrast with the Spanish average, which continued to fall in the first half of 2013, trading at an average of €1,064 per square metre less than the Ibiza average.

IBIZA RENTAL MARKET

Despite a slower start in 2013 than in the winter months of 2011 and 2012, Ibiza remains an incredibly popular destination for world travellers. While first quarter airport arrivals were lower than in the past two years, the spring months saw an increase in arrivals over previous years, registering a growth of 4.3% in tourist arrivals over the first half of 2012, which in itself was a record-topping year. This is in stark contrast with the rest of Spain, which averaged a 5.9% country-wide decrease in airport arrivals.

According to the Spanish Tourism Data agency Frontur, in the first half of 2013, 26.1 million tourists visited Spain overall, an increase of 4.2% over last year. The Balearic Islands (including Ibiza) and Catalunya were the principal destinations for the majority of tourists.

FOREIGN INVESTMENT INTEREST

The Lucas Fox website saw an increase of 64.15% in visitors viewing Ibiza property pages in the first half of 2013.

www.lucasfox.com

€ per Square Meter

1200

JanFeb

MarApr

MayJun

JulAug

SeptOct

NovDec

900

600

300

0

2011 2012 2013

Ibiza Airport Arrivals (‘000s): 2011 – Q 2 2013 / Source: Aena.es

Ibiza remains a popular investment choice for high-end buyers from the UK, France, United States, the Netherlands, Germany and Switzerland. The first half of 2013 has seen a huge growth in interest from Russian, Chinese, Indian and Brazilian residents, and from Scandinavian countries including Sweden, Denmark and Norway. Lucas Fox has also seen more interest from European buyers within the 30-40 year old age group.

LUCAS FOX ANALYSIS AND PREDICTIONS

“We expect to see very brisk trading in luxury Ibiza properties in the last two quarters of 2013,” predicts Lucas Fox Ibiza Director Maxim Rettich.

“As always it is difficult to get a very accurate feel for the development of sales prices on Ibiza due to the continuing gap between sales and asking prices and the multitude of objective factors involved

in deciding on a luxury purchase on the island. We expect that a number of new villa developments planned for the next few years will put increasing pressure on sellers to take a realistic approach to pricing.”

“More international hotel groups are looking at Ibiza as a potential destination for their businesses and we believe that the coming years will see another rise in the level of the island’s tourism sector with more and more focus on high end tourism.”

“So far, 2013 has been a chance for us at Lucas Fox to consolidate our reputation as the number one international agency in Ibiza,” adds Lucas Fox co-founder Alexander Vaughan “We are currently registering as many as 20 interested clients a day through our Residency in Spain joint venture with Spanish law firm ECIJA. We expect there to be a huge spike in demand from non European buyers when the new residency law comes into force”

International Visitors to Lucas Fox webpages for Ibiza property Q1 – Q2 2013 Source: Google Analytics for Lucas Fox website

Ibiza Average Property Sales Prices Q3 2010 – Q2 2013Source: Fotocasa.es, Idealista.com

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Alexander VaughanFounding Partner

Maxim RettichDirector Lucas Fox Ibiza

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E info@lucasfox.com / T (+34) 933 562 989www.lucasfox.com