The housing rental offer in Tenerife plummeted over the last decade. The data is compelling. The real estate portals offered 2,000 apartments for long-term rentals throughout the Island in 2013; today they do not reach 500 (exactly 496), four times less. If we add to this that public promotion is equivalent to zero in the decade and that vacation rental options – for short periods – are 24 times those of conventional rentals – 12,000 times 500 – it is possible to outline the reality of a sector in crisis. According to experts, everything is due to the consequences of a Housing Law, approved in May of last year, which places all responsibility on the ownerwhich leads you to not put your property on the market.
Between the two points of the comparison, 2013 and 2023, there are links in the chain that allow us to draw the temporal path of rental housing on the Island. Thus, in 2014 there were 1,850 apartments, with a slight decrease, and in 2020, in pandemic – a distorting factor in its favor – rose to 2,563. From there, in just three years, absolute disaster. Low supply, high demand – there are 25,000 registered Canarians waiting for social housing – and sky-high prices. And, meanwhile, in Canary Islands There are 150,000 empty houses.
Regarding the price, a note: according to data from the portals from the last quarter of last year, it rises in that time period by 3.2% in the province of Santa Cruz de Tenerife until reaching 12.2 euros per square meter, a historical maximum. In the capital it grows by 10.2% to reach 10.9 euros per square meter. The most exclusive market is Puerto de la Cruz: 14.5 euros.
But let’s return to the rental real estate market. Nothing better than knowing the analysis of an expert like Vanesa Rubio, who has been working in the sector for two decades. For her, “the shortage of rental housing is a serious problem” that she attributes to several factors. Among them “inaction policydespite the dozen regulatory changes in the last three years” and a state Urban Leasing Law (LAU), which was approved in May, which “despite being necessary, just like a Ministry, it is welcome, and is full of good intentions “it unbalances the balance of social responsibility against the owner.”
Ruibio wants to end “the false myth” of vulture funds or large holders – these “They do not invest in the real estate market, much less in the rental market, due to legal uncertainty”– because “the truth is that 80% of the market is taken over by small owners.” He emphasizes that they are “people who have saved their entire lives to have that wealth and who even still pay a mortgage and are afraid of putting their apartment on the market.” Even more so when “the rule makes it difficult in 2024 to launch and evict people due to non-payment of rent. It can take up to more than a year for the owner to recover their home».
The expert emphasizes that “the announced tax incentives of up to 90% are not really such because they refer to stressed areas. There are none declared in the Canary Islands, something that the regional government must decide. There are no advantages. She insists that the owners feel “defenseless and stigmatized.” “He believes there is a need for a more balanced Housing Law that supports them, encourages them and provides legal security.”
The dimension of the problem is such that “workers, waiters, doctors or teachers can no longer rent in certain areas of the south and have to live in the periphery.” Even “on some smaller islands the rent may disappear”.
Regarding public housing, the expert indicates that “in other countries it does not happen, but here it declines little by little. Starting from the Official Protection homes, the VPOs, which were bought and declassified as if nothing had happened. She clarifies that “of course we must have a public social housing stock, but not only with responsibility for the landlord.” She believes that there is not as much change in mentality as one thinks when it comes to buying or renting. “People on the Island, she points out, maintain the idea of acquiring housing as property or investment.” The rent is increasing, she points out, “but because there is no saving capacity”. A reflection: “I am more in favor of rehabilitation because in Tenerife and the Canary Islands there are many unfinished developments than of new construction.”
Vacation rental
Vanesa Rubio explains that “on average there is a transfer of 30% from traditional rentals to vacation rentals, residential rentals or temporary rentals, those that last only a few months related to those transferred for work reasons.” Tenerife is the Island with the most holiday home beds, with 54,168 integrated into 12,696 homes, 38.8% of the total supply in the Canary Islands.
The daily reality of renting in Tenerife is clear with the practical cases. A young person between 16 and 29 years old who rents a home alone will have to leave, on average, 94% of their income, according to the Emancipation Observatory of the Spanish Youth Council (CJE) in a report released last year. November. Royal announcement: «Those who rent must have an income from work such that the rent represents less than 35% of the salary. This is about 1,770 euros. Direct consequence: Tenerife residents who earn less than 1,800 euros per month are de facto excluded from the rental market. Untenable.
