Why buy a property in Gibraltar?

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Why buy a property in Gibraltar

Gibraltar’s unique position and advantages attract property buyers and investors from all over the world, drawn to the area as a safe and tax efficient place to invest with good rental returns.

This tiny jewel in the Mediterranean measures just 6.543 square kilometres (2.53 square miles) and its limited size coupled with a booming economy whose tax advantages attract service and technology companies in droves are the keys to the perpetual growth in values of property in Gibraltar.

As a place to live, there is nowhere like Gibraltar. With low income tax, no wealth tax, no VAT, free healthcare, free education (including university education in the UK), hardly any crime… and of course the best weather in Europe, there are so many reasons to choose Gibraltar as your permanent home.

Gibraltar airport is just two and half hours flying time from the UK and within easy reach of Malaga airport in Spain which adds dozens more destinations with direct connections.

Though the land mass of Gibraltar is small, it is the perfect gateway to southern Spain and the Costa del Sol with all the diversity the areas offer. From the glitzy Marbella to traditional villages and awe-inspiring national parks, there is an enormous amount to explore.

An 80 minute ferry journey will also take you across the Strait to Tangiers in Morocco where you can spend a long weekend immersed in a very different culture.

A sustainable growth economy

Underpinning the growth in demand for property is Gibraltar’s economy which has shown annual growth every year since the turn of the century. Gibraltar’s GDP per Capita is currently ranked third in the world, behind Qatar and Luxembourg with an overall output of more than £1.5bn and a resident population of about 34,000.

The economy is probably the most modern service and technology based in the world with growth driven by online gaming, insurance, financial services and technology including crypto currencies.

Since the year 2000, the number of jobs in Gibraltar has doubled, reaching nearly 28,000 yet the population has grown by a mere 5,000. The gap is filled by some 13,000 workers who stream across the border with Spain to work every day.

A large proportion of these skilled workers would prefer to live in Gibraltar if it were not for the shortage of properties available.

The Gibraltar Property Market

The imbalance of demand and supply of properties in Gibraltar’s property market is unlikely to improve. In order to simply keep pace with the increase in jobs, some 500 new properties would need to be built every year and this is simply not possible in the restricted space available.

The pressure on the housing market due to this ever-increasing demand results in a continual rise in property values and rental prices. Gibraltar property prices have risen consistently since the year 2000 and uniquely, there has been no boom and no bust.

The confined space means that there was no building boom and developers were unable to speculatively build thousands of new homes as they did in neighbouring Spain where too many properties were built to be greeted by insufficient demand on completion.

Unlike most of the rest of the world, there was no lending spree by banks causing a credit fuelled bubble in housing prices. In Gibraltar there are just two banks that have funded development and both require a high level of presales before making funding available to property developers. And unlike Spain where a 10% deposit was sufficient to secure an off-plan property, 25-30% is required in Gibraltar which is a much more difficult amount for a speculator to walk away from.

As a result, the few developments that are released in Gibraltar are well funded with a high level of purchase commitment, preventing any chance of a speculative property bubble.

The combination of rising demand, scarcity of land on which to build new developments, an undersupplied number of existing properties and financial controls to prevent property market bubbles means that an investment in Gibraltar property is one of the safest in the world.

Investment in Gibraltar Property

The Times recently called the Gibraltar property market a Rock Solid Investment  and they were not wrong.

The cost of buying a property in Gibraltar is low, certainly compared to the cost of buying a property in Spain. This ensures that an investor can start to see a return on the capital growth on his investment far sooner than his counterpart on the Spanish mainland who will have to wait much longer to see his initial costs covered.

With high levels of demand due to the disparity in demand and supply for property, selling the property also has much shorter timescales than Spain, where a property may languish for a year or more on the market without so much as a sniff from a potential buyer.

Approximately 20% of the Gibraltar property stock is purchased for investment reasons. Prices in the last decade have grown by about 35% in stark comparison to Spain where investors have yet to see values reach the heights seen a decade ago.

In the investment buy to let market, gross yields are between 5.5% and 6.25%, with investors favouring smaller units averaging 81 square metres, compared to owner occupiers who average 120 sqm as yields on larger homes decline as they are outside of the mainstream market. Cost of ownership and letting fees reduce the return by approximately 1%.

Letting demand is strong due to the high demand from workers and planned new developments are likely to release several hundred new units in the coming few years suitable for investment.

Demand for newly developed properties purchased off plan is very high, and often sell out within a few days… if not hours. If you are interested in purchasing a new development we advise you to get in contact with us now and you should be in a position to react quickly!

Property types in Gibraltar

Gibraltar has two residential property markets. One is government owned / funded social housing and designed for local resident to be able to continue to live in the area and the second is the local market. Access to the social housing market requires preconditions including historical residency while any nationality or non-resident may purchase on the open market.

Open market prices are significantly higher than social housing and specifications are much higher with a superior level of amenities such as communal swimming pools. About half of Gibraltar’s 13,000 residential homes are in the open market.

The most popular areas to purchase a home in Gibraltar are the South District, the beach front Catalan Bay, or the town centre.

All new properties are leasehold and there are very few freehold properties, mainly older homes in the town centre.


Mortgages have become more competitive, with low interest rates. Depending on status, it is possible to finance up to 90% of the purchase price for personal buyers and up to 75% for buy to let investors.

Who buys Property in Gibraltar?

Local Gibraltarian buyers constitute 39% of property owners, while British from the UK make up another 34%. The balance are a mixture of owners who are mainly European including high net worth individuals from countries such as Germany, France, Scandinavia and Holland and Spain.