Bricks vs banks
In 2008 during the recession Ibiza stood proud and resisted the curve that was present in most other parts of the world.
With tourism being such an important part of people’s lives and Ibiza being such an iconic brand, the impact hasn’t been the tsunami that everyone thought.
But is this year going to be different?
The answer in short is yes!
We have already lost 1/3 of the season as for the local residents, May and June have been all about fighting for their own existence and waiting on news for the first wave of travelers to reach its white sandy beaches. The Spanish government has been under a lot of pressure to make 2020 happen, but their hardline approach to socialism has been to resist the urge to follow some other countries within Europe to open its borders earlier, to help stimulate the economy.
Will hindsight prove them to be right?
Their bottom line is “people before pesos” and dealing with the now is more important than the future. But what will this effect have on the housing market in Ibiza?
Believe it or not the market has already started to surprise us. Sales are already in the pipeline with deposits paid into escrow waiting Due Diligence.
How is this possible, you ask, with everyone on lock down?
Sales via virtual tours by some of our international clients, who felt more and more convinced that money in brick has more value than in the banks!
With interest rates in banks heading towards negative, the need to use their savings became more and more apparent. If it is going to cost money to leave hard earned cash in the bank, it might as well be put into something that will give a return. The stock markets are too volatile to consider, unless you are playing with money back by a hedge fund or institution cash, so people’s mindsets are heading back to the generations before ours, and are backing bricks and mortar. These points coupled with the identity Ibiza has as a “safe place” along with the prospect of the COVID uncertainty, why not have a bolt hole in the sun with freedom of movement and glorious weather most of the year.
The paradise of Ibiza is becoming more and more attractive and prices have stabilised to a degree, but the real value is the fact that the yield on your investment property doesn’t lose value as in most other places, due to the vast market spaces an investment property in Ibiza can capitalize on!
Long term rental for people who wish to work remotely, safely and within a plethora of nationalities.
People who wish to put “their toe in” the market place and try before they buy.
The short stay villa rental market is multiple months as opposed to weeks. Working remotely is a real possibility and the infrastructure in Ibiza allows ease of travel between many cities on the continent and the UK.
Once the quarantine laws are more transparent, the surge to the island will be unprecedented by people who want to enjoy their freedom and celebrate the victory they feel against the uncertainties they have been experiencing during recent times.
And of course the vibrant, dynamic short stay rental that Ibiza has become famous for! The escape from reality that has a revolving door, to take them back to where they came from with a welcome sign of bienvenido tattooed on the mind forever.
With hotels uncertain about tourism and their bottom line under threat, it is easy to see why villa homeowners are resisting the urge to sell or drop their prices. But, there are deals out there to be done; you just need to look!
Two months ago many owners in Ibiza were worried about the future, and were calculating losses stretched across the two seasons due to cancellations or rescheduling their guests, and ultimately delaying their payments until next year. But now, with their 2021 looking nearly full, and 2020 a real possibility filled with clients escaping the city that has suffocated them for too long, the villa rental market of Ibiza has again stuck its chest out to the world and banged it with its two mighty fists!
With money never being so cheap, reverse interest on your savings at an exchange rate that will see positive yields over a mortgage period