Property prices in the Canaries continue to spiral, with the sustained rises prompting comparisons with the real estate bubble crash of 2008.
The latest figures from the Canarian Institute of Statistics (ISTAC) show that average valuations have grown by 29% in just five years, with properties fetching 1965.7 euros per square metre, a figure not seen since the market collapse of 17 years ago.
Some market analysts put the rise even higher, however. Investropa, for example, has published data showing that the increases range from 11.5% to 23% year-on-year at present, depending on the island, with current average prices standing at between €2,736-€2,865 per square metre for second-hand homes.
According to Investropa, the most expensive area in the Canaries is Adeje in Tenerife, where properties are selling at an average of €4,149/m².
Reasons cited for the sustained surge include limited supply, strong demand from foreign buyers, and robust tourism recovery.
The last factor is singled out by many experts as a primary cause of the current situation, given that the massive demand for short-term holiday lets has placed unprecedented pressure on property prices in many parts of the Canaries.
The Canarian government continues to take measures to increase the number of properties on the market in a bid to mitigate what it openly describes as a “housing emergency”. Among other steps, it has asked the Spanish Parliament to amend the Islands’ special REF tax regime to allow incentives to be offered to facilitate the purchase of homes for residential lettings.
