Property prices on the Kanaren reach a new record

Property prices in the Canary Islands exceeded the 3,000-euro mark for the first time in the second quarter, reaching 3,052 euros per square metre. This is according to the Association of Spanish Land Registries in its regular report. This represents an increase of 13.1 per cent within a single quarter.

The Canary Islands thus rank fourth among the Spanish regions with the highest property prices. Only Madrid, the Balearic Islands and the Basque Country are more expensive. Catalonia comes next after the islands.

Year-on-year, the price per square metre in the Canary Islands stands at 2,769 euros. This, too, is around ten per cent higher than in the same period last year. The Canary Islands Statistical Office (ISTAC) reported a price of 2,234 euros per square metre on the private housing market for the first quarter – 13.6 per cent higher than a year earlier.

Canary Islands: Fewer property purchases and higher house prices

The Canary Islands also fare poorly when compared with other Spanish provinces: the eastern islands, which belong to the province of Las Palmas, rank seventh. The province of Santa Cruz comprises the western Canary Islands. This region ranks eighth. In Las Palmas, the price rose by 13.6 per cent to 3,059 euros, and in Santa Cruz de Tenerife by 12.5 per cent to 3,045 euros. In the first quarter, Santa Cruz de Tenerife was still the more expensive province in the Canary Islands.

Between April and June, 5,970 flats changed hands in the Canary Islands. This was 15.3 per cent fewer than at the start of the year. Las Palmas de Gran Canaria lost 13.1 percentage points of market share compared with the previous quarter. This was the largest decline of all the provincial capitals.

At the same time, the flats sold on the islands became larger. According to figures from Spanish notaries, the average floor area increased by 2.2 per cent. Only four other regions recorded an increase, led by Castile and León with 5.6 per cent. In all other regions, they became smaller. The sharpest decline was recorded in Cantabria, with a fall of 10.2 per cent.

Across the country, flats sold had an average size of 100.7 square metres; in privately funded new-build properties, the average was 106.5 square metres, and in subsidised housing, 85.1 square metres.

Foreign buyers accounted for 29.3 per cent of all property purchases in the Canary Islands in the second quarter (more on this here). This represented the third-highest proportion in Spain, behind the Balearic Islands at 32.3 per cent and the Valencian Community at 31 per cent. In the province of Santa Cruz de Tenerife, the share stood at 32.2 per cent, whilst in Las Palmas it was 26.5 per cent. Year-on-year, buyers from the EU accounted for 18 per cent of flats sold.

Resale prices hit seventh consecutive record

The index for resale prices of identical flats rose by 3.1 per cent in the second quarter, marking the seventh consecutive record high. Over the year as a whole, the resale price rose by 16.7 per cent. Since the low point in 2014, the increase has totalled 127.7 per cent. The cost of home ownership has doubled within a decade.

According to the report, there is a structural imbalance between the supply of flats and high demand – although the latter is showing the first signs of slowing down. Added to this are sustained population growth (more on this below) and a continued slow rate of new-build construction.