House prices hit record in the Canary Islands

Property in the Canaries is now more expensive than at any time before, according to recent statistics from Tinsa.

New and used property is now 0.5% more expensive per square metre than it was in January 2008, when the housing boom reached its peak before the credit crunch and resulting financial crisis.

However, Tinsa’s report reveals important differences within the Spanish housing market, where the coasts and islands are experiencing higher prices than inland and metropolitan regions.

The reason for these price increases in tourist areas, according to Tinsa, is the growing presence of foreign buyers in the holiday homes sector, due to purchases for rental purposes and interest from professional buyers.

Sales to foreigners in tourist regions now have reached their maximum quota, representing 25% of the total, similar to the proportion just before the crisis.

“Foreign buyers are channelling savings that they made and still retain after the turbulence of the pandemic,” claim Tinsa.

The report also points out that new builds in Spain have fallen from 30% to 25% in a few years, with another exception for the coasts and islands, where construction that is mainly aimed at foreign buyers and the second-home market remains strong.

While the news is good for homeowners and sellers on the Canaries, it is likely to add more fuel to the rising criticism of the effects of mass tourism on the islands.

The Balearics recently proposed a ban on non-resident foreign buyers purchasing property on the islands, and similar schemes have already been floated in the Canaries. Currently, any such ban would go against EU directives, but many MEPs are hopeful that they can effect change.

And in Barcelona, the regional government recently announced its intention to ban Airbnb style tourist apartment rentals by 2028 in order to replenish the stock of residential rental properties.

On Lanzarote, meanwhile, the housing crisis continues, with many workers unable to find affordable accommodation on the island.