Ibiza is losing its magic as luxury VIP parties and sky-high rents force locals to leave in droves.
The crisis facing the Spanish island is becoming worse and worse, according to those born and bred there. Unable to move out of their family homes as the cost of living rockets, many young people are abandoning the Balearic island.
Others who’ve moved to Ibiza to work in its luxury superclubs, where entry can stretch into the thousands and single cans of water are flogged for £10, have discovered the rotten reality at the heart of the party paradise. Hundreds have found themselves living in shanty towns without water, power or access to healthcare.
The grim, widening gap between the haves and have-nots has given a bitter edge to the white sand beached isle that became a refuge for artists and hippies fleeing Franco’s fascist rule in Spain in the 1960s.
The bleak reality of Ibiza has been meticulously documented by local academics from Business Fights Poverty, who’ve just published the 100-page Reimagining Housing in Ibiza Report. The collective, which is determined to turn the fortunes of Ibiza around, has gone to great lengths to detail how the island’s problems can be fixed.
The organisation’s founder, Sofìa Ribas Bamber, told the Mirror: “I’m from Ibiza, born and raised, we live the situation and how it’s getting worse and worse every year.
“There is more and more luxury tourism. It just doesn’t feel fair. Ibiza used to be a place where everyone mixed with everyone. Increasingly, you see VIPs; it is becoming something different from what the essence of the island was. For us, the more you displace the local population, the more identity gets lost. And that is what makes a place unique. Neighbourhoods become full of second homes. It’s not a neighbourhood anymore.”
Tourism and Ibiza have gone hand-in-hand for years. Last year, tourism accounted for 84% of the island’s economy, with a record 3.7 million tourists visiting Ibiza and the smaller, neighbouring island of Formentera, whose combined population is around 160,000.
With a landmass a third of that of Greater London, and a permanent population 56 times smaller, space should not be in short supply. Yet the swelling of Ibiza’s population each summer, and the concentration of tourists into a handful of areas, including Playa d’en Bossa and San Antonio, has caused rents to rocket, locals to leave and shanty towers to appear.
“There are police, nurses, doctors, and workers who leave the island because they can’t afford to live here. Locals born and raised on the island have left because of not being able to move out of their family home. The informal settlements have become more and more visible over the past two to three years. I think about 800 people (live in them), but it might be much more extensive than that. It is spread across the island,” Sophie said.
Ibiza is synonymous with letting loose and wild nights for those lucky enough to travel there as holidaymakers, but for many young people on the island, it’s far less free. Fewer than one in five under‑35s has left the family home in the Balearics, while rents rose 10% in 2024.
Today, over 80% of home purchases on the island are made by non-residents, with 24,361 of Ibiza homes registered as tourist dwellings. Despite legislative efforts to reduce holiday let numbers, business is booming. The report estimates that nearly 30% of holiday lets (over 7,000 homes) are rented without a tourist licence.
Housing pressures are also felt by Ibiza’s immigrant workforce. An increasing number live in tents, caravans and makeshift structures, on land not zoned for housing, without access to sanitation, water, or electricity. Many remain excluded from basic rights.
Under Spanish law, they have the right to register their details with the town hall to receive health care access, yet some have been made to pay up to €400 (£348) to register illegally.
The challenges of living and working on Ibiza are squeezing the workforce. María Ángeles Marí Puig, an economist on the island, explained: “Over the past four years, the main problem has been a lack of workers, driven by the lack of rental housing. Many businesses have had to rent accommodation for their staff, or else they are simply unable to hire. Several companies have reduced their operations; some restaurants, for instance, have even cut their opening hours because or closed on certain days due to staff shortage.”
The academics at Business Fights Poverty are determined not simply to dwell on the challenges facing Ibiza, but to be part of the solution. The Reimagining Housing in Ibiza report rigorously details how government, NGOs, and businesses can work together to bring rents down, improve the lives of immigrant workers, and retain the island’s magic.
Looking at examples of success from other destinations with housing issues globally, the report highlights dozens of ways to tackle the problem. They include:
- Encouraging businesses to provide or co-develop staff housing that meets quality and affordability standards.
- Retrofiting and reusing underutilized buildings, such as offices and hotels, into housing.
- Adopting modular and prefabricated construction to lower costs and build faster.
- Pooling resources among employers to create shared housing for key workers.
The report also looks at how residents can have priority access to housing by studying examples from across the EU. For example, Austria uses zoning-based saturation thresholds to limit second homes, Amsterdam enforces self-use clauses for new builds, and Malta restricts purchases by non-residents to designated areas.
Sophie continued: “The issue in Ibiza isn’t just overtourism, that’s only one part of a much broader challenge. The real question is how tourist destinations manage their finite resources, particularly land and housing. We need a better understanding of how the existing housing stock is used, what remains empty and why, who has access to what, and how ownership patterns shape the local reality. Today, housing is increasingly treated as an asset rather than a social need, pushing out the very people who sustain the island’s economy and culture.
We believe there must be a better balance. Other regions, such as Austria, have found ways to preserve housing and land uses for local residents, and Ibiza can do the same. Through this study, we’ve sought to learn from those examples and to encourage a shift toward creative, long-term solutions, because simply building more homes will not make housing more accessible unless it is protected and planned for residents.
Going forward, we want to keep pushing this conversation, exploring new ideas through a creative lens, and collaborating with others to create spaces that foster cross-sector dialogue and co-designed solutions for a more balanced and resilient Ibiza.”