Authored by the expert who managed and guided the team behind the Spain Property Pack
Everything you need to know before buying real estate is included in our Spain Property Pack
Property prices in the Canary Islands are experiencing significant upward momentum as we reach mid-2025.
The archipelago's residential market has seen remarkable growth, with year-on-year increases ranging from 11.5% to 23% depending on the island and specific location. Current average prices stand between €2,736 and €2,865 per square meter for second-hand homes, while some reports cite €1,678 per square meter when including both new and pre-owned properties across all islands.
If you want to go deeper, you can check our pack of documents related to the real estate market in Spain, based on reliable facts and data, not opinions or rumors.
The Canary Islands residential property market is experiencing record-breaking price growth, with increases ranging from 11.5% to 23% year-on-year as of mid-2025.
Current average prices stand between €2,736-€2,865 per square meter for second-hand homes, driven by limited supply, strong demand from foreign buyers, and robust tourism recovery.
| Metric | Current Data (2025) | Change |
|---|---|---|
| Average Price per m² | €2,736-€2,865 (second-hand) | +13% to +23% y/y |
| 90m² Home Average | €216,038 | +47% (5-year growth) |
| New Units Built Annually | ~2,900 units | Far below 50,000 needed |
| Foreign Buyer Share | 31.77% of sales | +3.48% y/y |
| Fastest Growing Municipality | Guía de Isora, Tenerife | +36.8% y/y |
| Most Expensive Area | Adeje, Tenerife | €4,149/m² |
| Properties Sold in 3 Months | 50% of listings | Fast-moving market |
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
What are the current average property prices per square meter in the Canary Islands as of June 2025?
As of mid-2025, residential property prices in the Canary Islands range between €2,736 and €2,865 per square meter for second-hand homes.
These figures represent the most current market data available from multiple reliable sources tracking the archipelago's property market. However, there's significant variation depending on the methodology used for calculation and regional differences.
Some comprehensive reports that include both new and pre-owned properties across all price segments cite an average of €1,678 per square meter, reflecting the broader market including more affordable rural and older properties. For a typical 90-square-meter home, the average price stands at €216,038 as of the end of 2024, representing a substantial increase from €147,029 just five years ago.
The variation in pricing data reflects the diverse nature of the Canary Islands property market, with significant differences between tourist hotspots and rural areas, as well as between islands themselves.
It's something we develop in our Spain property pack.
How much have property prices increased in the Canary Islands over the past 12 months?
Property prices in the Canary Islands have experienced dramatic increases over the past 12 months, with growth rates ranging from 11.5% to 23% depending on the island and data source.
The most striking figure comes from the Fotocasa Real Estate Index, which reported a 23% annual increase in February 2025, marking the ninth consecutive month above 20% annual growth. This represents one of the highest property price increases in all of Spain.
The Idealista index showed a more moderate but still significant 16.3% year-on-year increase in January 2025, while Tinsa data reports an 11.5% increase for 2024 across the archipelago. Regional variations are notable, with Santa Cruz de Tenerife province leading with a 17.5% year-on-year increase to €2,865 per square meter, while Las Palmas saw a 14.7% increase to €2,542 per square meter in Q3 2024.
These increases far exceed the Spanish national average and place the Canary Islands among the fastest-growing property markets in Europe. The sustained high growth over nine consecutive months indicates this is not a temporary spike but a fundamental market shift.
Which municipalities in the Canary Islands are experiencing the fastest property price growth?
Several municipalities across the Canary Islands are experiencing exceptional property price growth, with Guía de Isora in Tenerife leading with a remarkable 36.8% year-on-year increase.
La Orotava, also in Tenerife, follows closely with a 28.8% annual increase, while Santa Lucía de Tirajana in Gran Canaria has seen prices rise by 25.4%. These three municipalities represent the most dramatic price appreciation in the archipelago.
Adeje in Tenerife currently holds the distinction of having the highest absolute prices at €4,149 per square meter, making it the most expensive area in the Canary Islands. Other municipalities exceeding €3,000 per square meter include Santiago del Teide, also in Tenerife.
The pattern shows that Tenerife, particularly its southern and western municipalities, is experiencing the most intense price pressure. This reflects the island's popularity with international buyers and its established tourism infrastructure, which creates sustained demand for both investment and vacation properties.
What types of properties are seeing the biggest price increases in the Canary Islands?
Newly built homes are experiencing faster price growth than existing properties in the Canary Islands, with the House Price Index for new builds reaching 164.09 compared to 142.81 for existing homes.
Luxury villas, sea-view properties, and homes in tourist hotspots are experiencing the most significant price increases, especially in Tenerife and Gran Canaria. Properties in coastal areas and those marketed for short-term rentals or international buyers are seeing the highest appreciation rates.
Apartments in coastal and urban areas are also in high demand, but villas and exclusive properties have seen the highest appreciation. This is particularly evident in areas like Costa Adeje and Playa de las Américas in Tenerife, where luxury residential developments with modern designs and stunning ocean views are commanding premium prices.
The limited availability of coastal properties plays a significant role in rising prices, as more people look to purchase or rent oceanfront properties while supply remains constrained. Properties suitable for vacation rentals are especially sought after, given the strong tourism recovery and the growing trend of remote work enabling property investment in desirable locations.
Get fresh and reliable information about the market in Canary Islands
Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.
How have property prices evolved over the past 5 and 10 years in the Canary Islands?
Property prices in the Canary Islands have experienced extraordinary growth over both five and ten-year periods, far outpacing most other Spanish regions.
Over the past five years (2019-2024), property prices have increased by 47%, with the average price for a 90-square-meter home rising from €147,029 to €216,038. This represents one of the most dramatic price appreciations in Spain during this period.
The ten-year perspective shows even more remarkable growth, with the house price index rising from 100 in 2015 to 164.09 for new builds in 2023—a 64% increase for new homes and 43% for existing homes. Over a twenty-year period since 2005, prices have increased by 60%, placing the Canary Islands among the top regions for price growth in Spain, second only to the Balearic Islands.
This sustained long-term growth reflects the islands' increasing popularity as a destination for international investment, retirement, and remote work, combined with limited land availability and relatively constrained new construction. The trend shows no signs of slowing, with experts predicting continued appreciation driven by fundamental supply-demand imbalances.
What are the property price forecasts for the Canary Islands in 2025 and beyond?
Property price forecasts for the Canary Islands remain overwhelmingly positive, with most experts predicting continued growth throughout 2025 and beyond.
For 2025 specifically, forecasts predict price increases ranging from 4% to 12% depending on the location and property type. The more conservative 4% estimate comes from sources focusing on the overall market, while the 12% figure reflects expectations for high-demand areas and luxury properties.
Long-term outlooks suggest ongoing appreciation due to persistent supply shortages, growing population, and strong international demand. However, experts warn of potential affordability challenges for local residents that could lead to government intervention. Most forecasts anticipate continued price growth, especially in established markets like Tenerife, Gran Canaria, and Lanzarote, as well as emerging areas including La Palma, El Hierro, and Fuerteventura.
The fundamental drivers supporting these forecasts include the limited annual construction rate of approximately 2,900 new units against an estimated need for 50,000 homes by 2030, continued foreign investment, and the archipelago's growing reputation as a destination for digital nomads and remote workers.
How is the limited housing supply affecting property prices in the Canary Islands?
The severe mismatch between housing supply and demand is one of the primary drivers of escalating property prices across the Canary Islands.
New housing developments are dramatically insufficient to meet demand, with only about 2,900 new units built annually compared to an estimated need for 50,000 homes by 2030. This represents a construction rate that is less than 6% of what's actually needed to meet demand.
High construction costs, which have risen to €1,000-€1,200 per square meter (up 40-50% in recent years), combined with land scarcity, have significantly slowed new residential construction. This is particularly acute for affordable and social housing, creating a supply shortage that has contributed to the 121% surge in prices since 2015.
The imbalance is most severe in popular islands and coastal areas, where prices and rents have soared beyond the reach of many local residents and essential workers. Additionally, the shift of 25,000-30,000 units to short-term rentals since 2022 has further reduced available housing stock, exacerbating supply shortages and driving up both purchase and rental prices.
It's something we develop in our Spain property pack.
We made this infographic to show you how property prices in Spain compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It's an easy way to spot where you might get the best value for your money. We hope you like it.
What impact are foreign buyers having on Canary Islands property prices?
Foreign buyers are having a significant impact on Canary Islands property prices, accounting for 31.77% of all property sales as of 2025, with this share increasing by 3.48% year-on-year.
The popularity with foreign buyers and digital nomads has substantially increased demand, especially for short-term rentals and luxury properties. Foreign purchases have pushed prices higher, particularly in southern Tenerife and Gran Canaria, where international buyers are willing to pay premium prices for desirable locations.
In 2024, the average price paid by foreign buyers reached a record €2,249 per square meter, representing a 7.4% year-on-year increase. This figure is notably higher than the overall market average, indicating that foreign buyers are targeting higher-end properties and driving up prices in the premium segment.
The shift toward short-term rentals, largely driven by foreign investment in vacation rental properties, has removed significant housing stock from the long-term market. The Bank of Spain has expressed concern that foreign buyers now purchase 20% of properties in the Canary Islands, a proportion that has contributed to affordability challenges for local residents and prompted government consideration of new restrictions on foreign property purchases.
How are government policies affecting the Canary Islands property market in 2025?
Government policies in 2025 are increasingly focused on cooling speculative demand and addressing affordability challenges in the Canary Islands property market.
The regional government is proposing new powers for municipalities to restrict or complicate foreign purchases, aiming to prioritize local housing access. These measures include potential designation of "residentially strained zones" where rent increases would be capped and short-term rentals limited.
New tax proposals and penalties for unlicensed tourist rentals are under active debate, including higher VAT (IGIC) rates specifically targeting short-term rental properties. The government is also considering stricter licensing requirements and increased fines for properties operating without proper tourism licenses.
While these measures are intended to cool speculative demand and ease pressure on local housing markets, their full impact remains to be seen. Real estate professionals suggest that such policies could temporarily slow price growth in certain segments while potentially redirecting investment toward other property types or locations within the archipelago. However, the fundamental supply shortage means that without significant increases in new construction, these policies alone are unlikely to reverse the upward price trend.
What is the current state of mortgage rates and financing in the Canary Islands?
Mortgage financing remains relatively accessible in the Canary Islands, with domestic mortgage approvals showing strong growth of 31.48% in January 2025 compared to the previous year.
Current mortgage rates in Spain, including the Canary Islands, remain at historically reasonable levels despite recent increases from the European Central Bank. The availability of financing continues to support property purchases, though rising interest rates have begun to impact affordability calculations for some buyers.
The significant increase in mortgage approvals indicates that buyers are still able to secure financing despite higher property prices. This suggests that the combination of strong demand, available credit, and confidence in the market's continued growth is sustaining purchasing activity.
For foreign buyers, Spanish banks generally offer competitive mortgage products, though they typically require higher down payments (often 20-30%) compared to domestic buyers. The favorable tax regime in the Canary Islands, including lower VAT (IGIC) compared to mainland Spain, continues to make property investment attractive even with slightly higher financing costs.
It's something we develop in our Spain property pack.
How quickly are properties selling in the Canary Islands market?
The Canary Islands property market is exceptionally fast-moving, with 50% of properties selling within three months as of 2025.
This rapid turnover reflects a highly competitive market environment where properties are quickly snapped up by eager buyers. The speed of sales has actually increased from 2023, when 55.4% of homes in Las Palmas de Gran Canaria were sold in less than three months, indicating that the market has become even more dynamic.
The fast-paced sales environment is driven by high demand combined with limited supply, creating scenarios where desirable properties receive multiple offers quickly. Properties in prime locations, especially those with sea views or in established tourist areas, often sell within weeks of being listed.
For potential buyers, this means that decisiveness is crucial when making purchase decisions. The market's quick turnover creates a competitive environment where buyers who hesitate often miss opportunities. This dynamic particularly affects foreign buyers who may need additional time for financing arrangements or legal procedures, making it essential to have pre-approval and legal representation in place before beginning property searches.
What should property investors know about rental yields and investment potential in the Canary Islands?
The Canary Islands offer attractive investment potential with strong rental yields, particularly in tourist areas where short-term rentals can generate substantial returns.
| Investment Type | Expected Annual Yield | Key Considerations |
|---|---|---|
| Short-term Rentals (Tourist Areas) | 6-12% gross yield | High management requirements, seasonal fluctuations, regulatory restrictions |
| Long-term Residential Rentals | 4-6% gross yield | Stable income, lower management, local tenant protections |
| Luxury Properties (Coastal) | 3-5% gross yield | High capital appreciation potential, exclusive market segment |
| Urban Properties (Las Palmas/Santa Cruz) | 5-7% gross yield | Strong local demand, proximity to employment centers |
| New Build Properties | 4-6% gross yield | Modern amenities, energy efficiency, warranty protections |
| Renovation Projects | 8-15% gross yield | Higher risk, substantial capital requirements, permit complexity |
| Rural Properties | 3-5% gross yield | Lower entry costs, limited rental demand, authentic experience |
Real estate professionals view the Canary Islands as a strong long-term investment, citing year-round tourism, favorable tax regime with lower VAT (IGIC), and a stable market that has proven resilient even during global downturns. The average cost of maintaining a property is €1,500 annually, including community fees ranging from €25 to €500 per month depending on property size and amenities.
However, investors should note the current average cost of property insurance at €300 annually and factor in potential new regulations affecting vacation rentals, particularly in areas declared special tourism zones.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Yes, property prices in the Canary Islands are going up significantly.
The evidence is overwhelming: with year-on-year increases ranging from 11.5% to 23%, sustained growth over multiple years, and fundamental supply-demand imbalances driving continued appreciation, the Canary Islands property market is experiencing one of the strongest upward trends in Europe. Current average prices of €2,736-€2,865 per square meter represent substantial increases from previous years, and expert forecasts predict continued growth through 2025 and beyond.
Sources
- Canarian Weekly - House Prices 60% Higher
- DA News - Canary Islands House Price Growth
- Canarian Weekly - Biggest Property Price Increases
- DA News - Housing Prices Soar 2024
- Investropa - Real Estate Forecasts
- Investropa - Real Estate Market Stats
- Kyero - Market Data
- Asesoría Quintero - Foreign Investment Analysis