Ibiza: Spain's raving beauty

Ibiza is preceded by its noisy reputation, but it has a peaceful side, too. By Graham Norwood

Mainland Spaniards call it the noisy island. In the 1980s, it was unfortunate enough to become a haven for England football fans. Then it became the Mediterranean music capital, again with Britons to the fore. But - whisper it quietly - Ibiza is going upmarket, and may just be calming down a little.

No one can deny that it remains a focus for DJs and dancers preparing themselves for the coming summer of what Ibiza calls the "club cycle" - on the beach until 6pm, in the bars until 11pm, then dancing until the disco sunrise at 6am, at which point it starts all over again.

But if you strip away its reputation, Ibiza - a tiny island only 14 kilometres wide and 42 kilometres long - ought to be a perfect location for people wanting to purchase a Mediterranean holiday home.

It has 72 beaches, historic Roman, Phoenician and Carthaginian remains, artists' communities and plenty of prestigious restaurants, as well as cheap and cheerful mass tourism resorts, bars and clubs. If you steer clear of the British cooked breakfast joints, traditional Ibicenco cuisine is delicious, and competitively priced outside the busiest areas.

Demand for property has been rising, albeit more gently than on Mallorca, and local Ibiza estate agents say that prices have risen by about 7 per cent in 2005, just as in 2004.

Most properties are small apartments in large-scale developments, typically costing between €100,000 (£68,000) and €225,000 (£154,000). But there are more expensive villas, too, whose prices rise with the relative size of the property and according to how far away they are from noisy nightclubs. There are older fincas (country properties), too, but these are few in number and can exceed €500,000.

James Price of Knight Frank, an upmarket British estate agency that has been selling property on Ibiza for seven years, admits: "It's not Mallorca. It doesn't have the critical mass of natural bays or outstanding scenery, and, so far at least, it doesn't have the frequency of direct air travel that a lot of Spain has."

But, he adds: "It's by no means dominated or destroyed by the club scene. That scene sets a tone that means that younger people tend to buy here. As a result there are aren't many stockbroker belt families who have a second home on the island, but it's quite sophisticated and on 90 per cent of the island you wouldn't know there was a club scene at all."

As if to prove that Ibiza can defy expectations, Price is marketing La Buena Sombra, which is by far the island's most expensive home, on sale for €19.8m. The 37,000 square metres of grounds encompass two private beaches and three principal houses - seven bedrooms and six bathrooms in total - plus a small staff house, a golf area, Olympic-size swimming pool, tennis court and gym.

"This property is scarcely typical," says Price, "but it proves that Ibiza can attract upmarket, high-net-worth owners." says Price.

Meanwhile, new infrastructure is being built to accommodate what it hopes will be more permanent and holiday-home residents as well as clubbing tourists. A motorway is being built between San Antonio and Eivissa, with a tunnel under the historic town of San Rafael and much controversy from disgruntled locals. Three golf courses are also under construction, along with two new large marinas in addition to substantial improvements of seven local harbours around the island.

As for access, Air Madrid, a Spanish low-cost internal airline, is now flying regularly to Ibiza, and the island's airport is being modernised; it already receives flights from 23 UK airports. and employs 8 per cent of the island's population.

"Ibiza's growing reputation as an island for the rich and famous is having a direct effect on the areas where people want to buy," claims Miguel Llabres Hargreaves of the estate agency www.escapes2.com.

He says that the construction of a five-star hotel near the modern harbour at Paseo Maritimo has attracted well-heeled buyers, while the older harbour area of La Marina is seeing the conversion of many period commercial buildings into upmarket homes.

"San Antonio is starting to lose its 'lager lout' reputation and, like the rest of the island, is trying to go upmarket. Plans are afoot to build a new marina to attract the wealthy private yacht owners," he adds.

The island's property investment market is thriving, and there is a particular demand for short-let apartments for the six-month summer season (although landlords must accept that wear and tear is extreme). Managing agents charge steep fees, sometimes as much as 25 per cent of rental income, but claim with justification that tenants can be demanding. Highest demand is for large apartments capable of accommodating at least four sharers.

It remains to be seen if Ibiza can succeed in changing its hedonistic party reputation. But stealth measures - for example, the authorities have encouraged bars and hotels to raise prices in a bid to stamp out the worst package holiday excesses - might help the island's image to improve.

Ibiza's property market might just be at the start of a boom property market hitherto ignored by most holiday home buyers. But, if you take the plunge, remember to take your ear plugs to the noisy island...