The island of Ibiza is facing a dramatic shift in its housing market. The Ibiza rental price increase has grown by roughly 70 % over the past decade. Local residents, landlords and investors now all face new realities in one of Europe’s most dynamic rental destinations.

The Scale of the Rise

A decade of rapid growth

Over the past ten years, rental prices in Ibiza have climbed by about 71 %. What cost €1,000 a decade ago now costs around €1,700, reshaping affordability and expectations across the island.

Current rental levels

In 2025, average rents in the Balearic Islands reached around €19 per m², with Ibiza’s municipalities such as Santa Eulària and Eivissa exceeding €20 per m². An 80 m² apartment in these areas can easily surpass €1,600 per month, highlighting how the island’s rental market has become one of the most expensive in Spain.

Why The Ibiza Rental Price Increase Is Happening

Strong tourist demand and limited housing

Ibiza remains one of Spain’s most popular destinations. The constant influx of tourists fuels short-term rental demand, which reduces the availability of homes for long-term residents.

Local supply constraints

Strict zoning rules and environmental protections make new construction difficult. This limited supply, combined with growing demand, pushes rents even higher.

Inflation and investor appetite

General inflation and strong interest from investors seeking profitable rental properties have amplified the price surge. Ibiza’s reputation as a luxury destination has further encouraged premium pricing.

Regulation and the tourism effect

Authorities have begun taking action against illegal tourist rentals, which distort the market. However, the effect of these measures is gradual, and housing shortages remain critical.

Effects On Residents, Landlords And Investors

For residents

Local workers face rising rents that outpace wages, forcing many to share homes, move inland, or even leave the island. The Ibiza rental price increase has become a central social issue, threatening community stability.

For landlords

Property owners benefit from higher yields but also face stricter rules and a growing debate about ethical rental practices. Many must balance profitability with social responsibility.

For investors

Investors continue to see opportunity in Ibiza’s property market but need to factor in potential regulatory shifts, sustainability pressures, and changing tourism patterns.

What To Watch Going Forward

Regulation changes

Future policy decisions will determine how the market evolves. Stronger restrictions on tourist rentals could free up housing for residents and stabilise prices.

Economic and demographic trends

If local salaries don’t increase, the rental market may hit an affordability ceiling. Economic slowdowns or shifts in travel patterns could also impact demand.

Supply-side initiatives

Efforts to develop affordable housing and encourage year-round rentals will be essential to balance the market and mitigate the Ibiza rental price increase.

Conclusion

The Ibiza rental price increase represents both opportunity and challenge. While investors and landlords enjoy record returns, residents face unprecedented housing costs. The coming years will test the island’s ability to balance its global appeal with the needs of its local community.