The respected Spanish daily newspaper ‘El Pais’, recently graphically illustrated how the Canary Island’s property market differs from the mainland. Using figures from the Spanish National Statistics Office, they charted the sale of property built since 2005. The results demonstrated just how different the Canary Islands are from the mainland property market, thousands of miles away.
The over supply of housing in mainland Spain is well known. The Costa’s have been ravaged by developers, building a myriad of apartments over what was once open countryside and coastline. Clearly there is a crisis in these areas, as many of these newly built properties remain unsold. The overall figure, however, does not show local variations and upon closer inspection the Canary Islands (in particular Tenerife) cannot be viewed in the same manner. In fact the island group has outsold every other part of Spain by a considerable margin.
Economists at the University of Alcala de Henares looked at the total number of completed homes with numbers sold for each area. This created an accurate map of house purchase activity for Spain. In areas like Murcia which has become popular with foreign buyers, some fifty percent of properties have yet to find a buyer.
The situation is reversed in the Canary Islands with the statistics showing that more properties have been sold than have completed. This may seem a strange figure, however, it takes into account that there are properties that have been sold on developments that have yet to complete. According to this result, there are fewer unsold new developments in the Canary Islands than anywhere else in Spain.
The statistics clearly show just how unique the property market is in the Canary Islands and experts have been quick to cite the reasons why. These include the growing foreign population particularly from the U.K. as more and more people seek a better quality of lifestyle and lower taxes. The unique climate and perhaps most importantly, the limited stock of new housing during this period are the factors underlying this balance of supply and demand. ‘Tenerife like the rest of the islands looks like the only place in Spain to have got the balance right’ commented one influential expert.
For both property buyers and sellers in Tenerife, this news comes as no surprise. Tenerife experienced a slowdown in demand attributable to buyer confidence in the face of a myriad of depressing press news concerning the property market in mainland Spain. People forgot that although under the sovereignty of Spain the Canary Islands are an autonomous community with their own government, over a thousand miles away from mainland Spain. It is like comparing property in central London with a property in the Outer Hebrides and expecting to find similarities.
The outcome of the bad press for the mainland has been a drop in confidence, from both buyers and sellers. This has developed into an exceptional situation in Tenerife where buyers can choose from an unprecedented range of value for money properties. This situation will of course not last, as both buyers and sellers discover that the property market in Tenerife is distinct from the mainland Spain and very much stronger. Until that happens, we are witnessing a unique ‘window of opportunity’ for the shrewd buyer who can obtain extraordinary value for money now.
