Finding a home in the Canary Islands to buy or rent can become an impossible mission. Not only is the supply of real estate for sale increasingly scarce, but the stock of houses for rent has also been drastically reduced in the last year. The demand, especially for the acquisition of properties, has been so high that some operations hardly take days to close, compared to the months of previous times, and the law of the fastest is imposed to be able to get hold of the most interesting properties.
According to data from the well-known Idealista real estate portal, the stock of homes for sale has plummeted in the two provincial capitals of the Canary Islands, where there are more people interested in buying a property. In Santa Cruz de Tenerife, supply in the second quarter of this year was 24% below that of the previous year, while in Las Palmas de Gran Canaria it fell by 16%. The percentages are inverted if the provincial figures are taken into account. While in the eastern province houses for sale have plummeted by 21%, in the province of Tenerife as a whole the stock has only dropped by 4%.
Many properties barely last 48 hours in the Archipelago real estate market
“It is true that there is not so much property, real estate agencies are fighting for them,” explains Isidro Martín, delegate of the Association of Real Estate Experts in the Canary Islands (Apei). Among the reasons behind this decline, Martín includes the boom in sales that has existed in recent months, which caused the sector to reap figures in the first quarter of this year that had not been recorded since 2008. A real estate fever that has removed many homes from the market without others having entered it.
One of the reasons is the lack of new promotions, since since the bubble burst, new construction is very limited in the Archipelago and the one that exists is sold practically all off plan and at prices that specialists do not hesitate to describe as « very tall”.
“In the market there have been a few years of prosperity and what should be built to cover this need is not being built,” warns Martín. From his point of view, there is a lot of demand but the promoters are afraid to launch themselves in part because of the difficulties that the banking entities put on them. «Banks do not provide anything, they require between 25 and 50% of flats reserved on plan to provide financing», something that ensures is difficult to achieve. In addition, the price of plots suitable for building has not fallen as much as estimated and remains high, to which is added the increase in the cost of materials due to the post-pandemic lockdown and inflation, which can end up significantly increasing construction costs. the construction.
Banks are not introducing too much into the market now stock of which they still have accumulated. “They are dosing” with the intention of balancing their annual accounts, points out the real estate expert, since otherwise if too many ‘for sale’ signs are hung, it would end up influencing prices down. The economic uncertainty has also ended up removing properties from the real estate market that their owners retain “for what could happen.” Which adds one more reason why the supply has been reduced so much in a single year.
The limitation of the rise in income since April to 2% has reduced the offer in the two provinces
But Those who want to rent do not have it easy either. According to Idealista, the supply of rental housing in the Canary Islands has fallen by 43% in the province of Las Palmas and by 45% in that of Santa Cruz de Tenerife. “Depending on the price, there are operations that can be closed in 24 or 48 hours,” says Martín, since there is also a high demand, which makes it easier for the owner to demand greater requirements from the tenant, in addition to exorbitant prices.
The reasons for this decrease in supply must be sought, according to the Apei delegate, in the withdrawal of properties derived from the limitation of the increase in rents linked to the CPI to 2% -it was approved temporarily from April to June, but the central government has decided to extend the measure until the end of the year, with around 146,700 Canarian households having saved some 96 million euros by December 31 – and the threat of the income ceiling included in the new housing law that will be It is being processed in the Congress of Deputies.
The keys to this reduction
- The phenomenon that the real estate market in the Archipelago is experiencing is not exclusive. Throughout the country, the number of homes for sale has decreased by an average of 8% according to data from Idealista. The real estate portal points out that the downward trend is accentuating, since the reduction in supply in the first quarter of the year was 1%.
Las Palmas leads
- The eastern province of the Archipelago is the third at the national level that has experienced a greater decrease in properties in the real estate market. In the second quarter of this year they fell by 21%. In the first position is the Andalusian province of Huelva with a reduction in the market that exceeds 30%
- The supply of rental housing has been reduced by 37% during the second quarter of 2022 throughout Spain. The fall in the two Canary provinces has been more pronounced than the average for the country, since in both it has decreased by more than 40%. A situation that makes it increasingly difficult to get a home.