Renovation & refurbishing projects that yield the best returns in Ibiza

As space for new developments becomes increasingly limited, many buyers in Ibiza are discovering that the best opportunities aren’t always brand new — they’re already built. Renovation and refurbishment projects are proving to be one of the smartest ways to generate capital growth, combining lifestyle appeal with strong investment performance. With the right property, design approach, and execution, upgrading an existing home can deliver both immediate comfort and long-term financial reward.

Why renovation makes sense in Ibiza

The island’s property market remains robust, with limited supply and high demand keeping prices strong across all segments. At the same time, planning permissions for new builds are more tightly regulated, making refurbishment one of the most efficient and sustainable ways to add value. Buyers are increasingly seeking authentic properties — traditional fincas, rustic villas, and character-filled townhouses — that they can modernise without losing their Ibizan soul.

Whether the goal is a secondary residence, a year-round home, or a high-yield rental property, well-planned renovations allow investors to create something truly bespoke while significantly increasing resale potential.

Property types that deliver the best ROI

Traditional fincas and rustic homes

Found across areas like San Juan, Santa Gertrudis, and San Rafael, fincas are among Ibiza’s most desirable property types. These centuries-old farmhouses, with thick stone walls and whitewashed facades, hold enormous charm — and potential. When restored with sensitivity, they can command resale prices 30–50% higher than unrenovated equivalents.

Adding modern comforts such as underfloor heating, efficient cooling, and high-end kitchens can transform them into sought-after luxury retreats, while still preserving their historical character.

1970s–80s coastal villas and family homes

Many homes built in the 1970s and 80s — especially around Siesta, Jesús, and San Carlos — offer solid structures but outdated layouts. By opening up interiors, updating finishes, and improving energy efficiency, these homes can yield 20–30% value uplift. Buyers benefit from generous plots and established locations close to the sea, often at lower entry prices than contemporary builds.

Townhouses and apartments in established towns

In Santa Eulalia and Ibiza Town, older apartments and townhouses remain in high demand. Simple yet impactful refurbishments — modern kitchens, updated bathrooms, new flooring, or an upgraded terrace — can increase rental income by 15–25%, while reducing time on the market.

Upgrades that add the most value

Certain improvements consistently deliver high returns in Ibiza’s competitive market:

Modern kitchens and bathrooms: The most effective upgrades for visual and functional impact.

Outdoor living enhancements: Adding or upgrading terraces, pergolas, pools, or chill-out zones increases lifestyle appeal and resale value.

Energy efficiency: Solar panels, insulation, double glazing, and heat pumps are increasingly in demand, particularly among eco-conscious buyers.

Smart home systems: Integrated lighting, security, and climate control enhance comfort and attract a higher-end rental audience.

Legalisation and compliance: Bringing older properties up to code or securing missing documentation can substantially increase both marketability and sale price.

A fully renovated finca that incorporates sustainable upgrades such as solar energy and high-efficiency systems can add €100,000–€150,000 to its resale value, depending on size and location.

Typical costs and return expectations

Every renovation project in Ibiza has its own character, but certain patterns can help guide expectations.

A light refurbishment — new paint, floors, and fixtures — typically costs €600–€1,000/m² and can lift a property’s value by 10–15%, especially in well-located apartments.

Stepping up to a mid-level renovation, including updated kitchens, bathrooms, or improved layouts, usually requires €1,200–€2,000/m², often yielding a 20–30% increase as functionality and aesthetics align.

For those transforming a home inside and out, a full renovation involving new installations, structural work, or landscaping can reach €2,000–€3,000+/m². These projects typically achieve a 30–50% uplift, turning tired villas into contemporary, high-demand residences.

And then there are historic finca restorations — the most meaningful and meticulous projects on the island. With costs of €2,500–€4,000/m², these homes can see 40–60% added value once sensitively restored and legally updated.

Across all project types, one principle holds true: quality craftsmanship and authentic materials consistently recoup their investment. Buyers in Ibiza recognise — and pay for — meticulous work and timeless design.

A market built on transformation

In Ibiza, renovation is more than a design trend — it’s a pathway to lasting value. With careful planning, the right location, and an understanding of buyer expectations, refurbishing an existing home can outperform new construction in both ROI and emotional reward. As the island continues to evolve, the most visionary investors are looking not to build more, but to revive what already exists — combining tradition, sustainability, and design innovation.

If you’re exploring the idea of purchasing or renovating a property in Ibiza, our Engel & Völkers team can guide you through every stage — from identifying the right project to connecting with trusted architects, contractors, and legal experts.