Thursday, February 29, 2024

The Canary Islands show anomalous behavior in home sales and rentals

Fotocasa’s Research Director, María Matos, indicated that the Canary Islands closed in 2023 registering “anomalous” behavior in both the home sales and rental markets due to the lack of supply, due to the fact that it of the islands, and for achieving a record price by reaching the historical maximum level of buying and selling in the market, even above that registered during the real estate boom before the 2008 crisis . This is shown in the data from Real Estate Index Fotocasa.

Almost 30% of home buyers in the Canary Islands are foreigners

In particular, the Canary Islands ended the year 2023 placing the highest sales price at 2,421 euros per square meter, and reached the second highest rental price in the entire historical series with 12,79 euro per square meter.

The reasons for these prices, Matos explained in an interview with Europa Press, are many and he cited some such as not being able to expand the offer “easily” because they are island territories, adding to this attraction of the tourist population, which, with “very high” purchasing power, leads to the “displacement” of the local resident from some areas.

Foreigners buy almost 30% of the houses

Matos added that in the Canary Islands, 28% of home purchases are made by foreigners, a percentage that rises to 38% in the island of Tenerife and 23% in Gran Canaria, although they are lower in places like Alicante where The actual purchase of land by non-residents reaches 45 percent.

The second-hand housing market showed a “very significant” year-on-year increase, which is one of the highest increases seen throughout history, surpassing in 2007, before the real estate bubble, since the price of housing second – hand. (2,421 euros/m2) is 15 percent more than the price recorded in 2007, when it was 2,101 euros per square meter.

In relation to this, he explained that the “main reason” for the “significant” price increase is the “imbalance” between supply and demand, because the supply is “very scarce”, to which he added that the public supply. housing is “not enough”, about 2%.

Another “real estate boom” after COVID

In any case, Matos pointed out that the demand increased after the coronavirus pandemic, when a “real estate boom” took place, and although he emphasized that the market of the archipelago was resistant to the increase in interest rates of the European Central Bank, he confirmed. that 28% “paralyzed” the buying process but are expected to return to the market if prices do not continue to rise.

Finally, data on the rental market increased by 13.6% year-on-year, which is one of the highest increases in the history of the Fotocasa Real Estate index, although it was explained that the increases were “very pronounced” since May 2022.

World Nation News Desk
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