LAS PALMAS DE GRAN CANARIA – Half of all homes sold in the Canary Islands last year went to foreigners. This makes the archipelago seem to have become an ideal destination for people looking for a second home and investment.
This is according to a report published on Antena 3, which is based on data from the General Council of Notaries and the Spanish statistical office INE. One of the conclusions of the report is that the profile of people buying houses in the Canary Islands has changed. Instead of pensioners, it is now young families who want to invest in a Spanish region with a favourable climate all year round.
In total, 1,132 transactions were concluded between July and September alone by foreigners living in Spain. That is 43.2% more than the 790 recorded by the ministry in the third quarter of 2021. Non-resident foreigners in Spain closed 1,676 sales. This represents an increase of 52.6% compared to the third quarter of 2021.
In Spain, after three consecutive years of price drops, prices have risen by just 4%, Idealista says. Although other sources point to a higher price increase. Due to the rise in interest rates and inflation, a large part of the demand for purchase will shift to rental housing. This is expected to put even more pressure on rental prices.
Possible slight downward correction of prices in 2023
Due to the effects of inflation and the rise in rates, many buyers will not be able to buy. Therefore, it is possible a decline in the number of transactions and perhaps a slight downward correction in house prices will become visible in 2023. This was told by experts to the property portal Idealista.
The price of properties in Spain is competitive compared to other European countries. Moreover, Spain has a favourable climate and a lot to offer in terms of culture. Those are key elements to attract large international portfolios to Spain, according to the same experts.
Coastal communities and islands most popular among foreigners
The number of foreign buyers is therefore greatest in certain coastal communities and island groups. According to property register figures, the Balearic Islands, the Canary Islands, the Valencian Community, the Region of Murcia and Andalucia were the areas with the most sales to foreigners.
A real estate agent in Tenerife tells Antena 3 that buyers last year were mainly Germans, Lithuanians, Poles even Croats with money saved up during the pandemic. “The beautiful houses are selling like hotcakes and there are already waiting lists”. It sounds like the market is asking for new construction.