Is it worth it buying property in Canary Islands in 2025?

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INVESTROPA

A team specialized in real estate investing in European countries (Spain, Portugal, Italy, Greece, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Spain. If you'd like to learn more about us, you can check our presentation page.

What kinds of properties are actually available in the Canary Islands right now?

The Canary Islands property market offers five main types of real estate as of June 2025.

Apartments dominate the market, ranging from €150,000 studios in local neighborhoods to €800,000 luxury penthouses with ocean views in Costa Adeje or Maspalomas. Modern developments in urban centers like Las Palmas and Santa Cruz de Tenerife offer 1-3 bedroom units with communal pools and parking.

Detached houses and townhouses are available from €250,000 in traditional Canarian villages up to €2 million for contemporary villas with private pools. Rural fincas (country houses) with land start around €300,000, while beachfront villas in prime locations command €1.5 million and above.

Building plots are scarce due to strict environmental regulations, but when available, they range from €100,000 for inland plots to €500,000+ for coastal locations with sea views. Most plots come with existing building permits, which significantly adds to their value.

Commercial properties including shops, restaurants, and small hotels are also available, with prices varying dramatically by location and tourism potential. It's something we develop in our Spain property pack.

Is it better financially to rent or to buy a property in the Canary Islands in 2025?

Buying is financially superior to renting if you plan to stay longer than three years in the Canary Islands.

Mortgage payments for a typical 2-bedroom apartment range from €800-1,200 monthly (including insurance and community fees), while renting the same property costs €1,000-1,800 monthly depending on location and season. This means buyers save €200-600 monthly compared to renters.

Property values have increased 47% over five years, meaning buyers gain equity appreciation averaging 9.4% annually. With continued growth predicted at 8-12% for 2025, a €300,000 property purchased today could be worth €324,000-336,000 by end of 2025.

Rental yields for property owners reach 4-7% annually for long-term lets, and up to 7%+ for short-term vacation rentals in tourist areas. However, new regulations requiring registration and licensing for short-term rentals take effect July 2025, potentially affecting returns.

Renting offers flexibility for those uncertain about long-term plans, but rental availability is increasingly limited in desirable areas, and prices rise 10-15% annually in tourist zones.

What are the average property prices like in the Canary Islands today, and how do they compare to a few years ago?

Property prices in the Canary Islands averaged €2,800-€3,300 per square meter as of June 2025, varying significantly by island and location.

A typical 90-square-meter home that cost €147,029 in 2019 now costs €216,038 in 2024, representing a 47% increase over five years. Annual growth reached 11-16% in 2024, significantly outpacing mainland Spain's 7-9% growth rate.

Luxury properties experienced even steeper increases, with beachfront villas in Puerto de Mogán and Costa Adeje seeing 60%+ price appreciation since 2020. The limited supply of premium coastal properties continues driving these exceptional gains.

What do experts and market trends say about how property prices in the Canary Islands might change in the next few years?

Real estate experts predict Canary Islands property prices will rise 8-12% in 2025, followed by 6-10% annually through 2027.

The Spanish Property Federation forecasts continued strong demand driven by post-pandemic lifestyle changes, with remote workers and retirees seeking permanent Canary Islands residence. Limited new construction due to environmental restrictions will keep supply tight, supporting price growth.

Tourism recovery has exceeded pre-pandemic levels, with 16 million visitors in 2024 compared to 15.1 million in 2019. This drives vacation rental demand and investment property purchases, particularly in established resort areas like Playa de las Américas and Maspalomas.

However, some experts warn of potential overheating in luxury segments, where prices have doubled in prime locations since 2020. The European Central Bank's interest rate policies will influence mortgage availability, though Spanish banks maintain favorable lending terms for Canary Islands properties due to their investment appeal.

Climate change concerns actually benefit the Canary Islands, as northern European buyers seek stable, warm climates free from extreme weather events affecting mainland destinations.

What's the full process of buying a property there—step by step, from first visit to final signature?

The Canary Islands property purchase process typically takes 8-12 weeks from offer to completion.

First, obtain your NIE (Número de Identificación de Extranjero) from Spanish authorities, required for all property transactions. Open a Spanish bank account to facilitate transfers and mortgage applications if needed.

After viewing properties and making an offer, sign a reservation contract (contrato de arras) with a 10% deposit. This reserves the property for 30-45 days while conducting legal checks. Your lawyer verifies ownership at the Land Registry, checks for debts or liens, and confirms planning permissions and community fees are current.

If requiring a mortgage, Spanish banks typically lend 70-80% of property value to non-residents, requiring proof of income, employment, and existing assets. Processing takes 3-4 weeks.

Complete the purchase before a notary (notario) by signing the escritura pública (public deed) and paying the remaining balance plus taxes. Property transfer tax ranges from 6-10% depending on property value and region.

Finally, register the property at the Land Registry within 60 days to secure legal ownership. Total costs including taxes, legal fees, and notary charges typically add 10-12% to the purchase price. It's something we develop in our Spain property pack.

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Where can I find properties for sale in the Canary Islands—are there trustworthy agencies or platforms to check out?

Several established platforms and agencies specialize in Canary Islands real estate for international buyers.

Online portals include Properstar, Rightmove International, Kyero, and Idealista, which offer comprehensive listings with English descriptions and virtual tours. These platforms allow filtering by price, location, property type, and features like sea views or pools.

Reputable local agencies include Canarian Properties (specializing in luxury properties), Gilmar (with offices across all islands), Cardenas Real Estate in Gran Canaria, and Engel & Völkers for premium properties. These agencies provide bilingual service and legal support throughout the purchase process.

KPG Property focuses on new-build developments, while Canary Immo specializes in investment properties with rental potential. Many agencies offer virtual viewings and can arrange inspection trips for serious buyers.

For the best deals, work with agencies that have exclusive listings and local market knowledge. Avoid private sellers without proper legal representation, as property fraud occasionally occurs in tourist areas.

How much does my budget actually get me in different parts of the islands, and what kind of property can I realistically expect?

Your budget determines both location options and property quality across the Canary Islands as of mid-2025.

With €200,000, expect a renovated 2-bedroom apartment in traditional towns or a small house requiring updates in rural areas. Community fees range €50-150 monthly for apartments.

€500,000 provides a modern 3-bedroom house with garden in mid-range coastal areas, or a 2-bedroom apartment with sea views in tourist zones. Premium locations require €750,000+ for equivalent properties.

€1 million secures luxury villas with private pools, premium finishes, and prime locations near beaches or golf courses. These properties often generate €40,000-70,000 annual rental income.

Which areas of the Canary Islands are considered affordable, up-and-coming, or upscale—and what are the pros and cons of each?

The Canary Islands offer distinct investment opportunities across three main market segments.

Affordable areas include inland Gran Canaria towns like Gáldar, Teror, and Icod de los Vinos, where houses cost €1,100-1,700 per square meter. These locations offer authentic Canarian culture, lower living costs, and potential for capital appreciation as tourism expands inland. However, they lack beach access, have limited international amenities, and generate lower rental yields.

Up-and-coming areas include El Médano in southern Tenerife, known for windsurfing and growing digital nomad communities, and San Cristóbal in Las Palmas, benefiting from urban regeneration projects. These areas show 15-20% annual price growth and attract younger buyers seeking authentic experiences. The risk involves uncertain development timelines and changing neighborhood dynamics.

Upscale areas encompass Costa Adeje, Maspalomas, Puerto de Mogán, and Playa de las Américas, where properties cost €3,000-8,000+ per square meter. These locations offer luxury amenities, established rental markets, and prestigious addresses appealing to international buyers. Drawbacks include high purchase prices, tourist crowds, seasonal noise, and premium maintenance costs.

Golf resort areas like Abama and Golf del Sur represent emerging luxury segments, combining upscale living with sports amenities and attracting affluent retirees.

What are the main mistakes that foreign buyers or first-timers tend to make when buying property there?

Foreign buyers commonly make five critical errors when purchasing Canary Islands property.

The biggest mistake is skipping independent legal representation, instead relying on the seller's lawyer or estate agent for legal advice. This leads to missed red flags like planning violations, outstanding debts, or illegal short-term rental restrictions that can cost thousands later.

Second, buyers fail to verify zoning and legal use, particularly crucial for vacation rental investment properties. New regulations require specific licenses for short-term rentals, and many properties lack proper permissions. Always confirm rental legality through official municipal channels.

Third, underestimating total costs beyond the purchase price catches buyers unprepared. Budget an additional 10-12% for taxes, legal fees, notary costs, and immediate repairs or renovations. Property transfer tax alone ranges 6-10% of purchase price.

Fourth, inadequate property inspections often reveal expensive structural issues, outdated electrical systems, or community building problems after purchase. Hire independent surveyors familiar with local construction standards and climate-related wear.

Finally, choosing locations based on vacation experiences rather than long-term livability leads to regret. Visit during different seasons, check noise levels, transport links, and local amenities before committing to purchase.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Spain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What's the overall cost of living in the Canary Islands, especially compared to mainland Spain or other European hotspots?

Living costs in the Canary Islands are 15-25% lower than mainland Spain and 30-40% below major European cities as of 2025.

Monthly living expenses for a single person average €1,400-1,500 excluding housing, while families of four need €2,800-3,000 monthly. Grocery costs are slightly higher than mainland Spain due to island logistics, but utilities and transport remain affordable.

Housing represents the largest expense variation by location. Rent for a 1-bedroom apartment ranges €600-1,000 monthly in local areas, €800-1,400 in tourist zones. Purchasing provides better value, with mortgage payments typically €200-600 below equivalent rental costs.

Utilities average €60-80 monthly for standard apartments, including electricity, water, and internet. Mobile phone plans cost €15-30 monthly, while comprehensive health insurance ranges €50-120 depending on coverage and age.

Dining out costs 20-30% less than northern European cities, with quality restaurant meals €12-25 per person. Local markets offer fresh produce at excellent prices, particularly fruits, vegetables, and fish.

Transport is economical, with island-wide bus systems costing €1-3 per journey and monthly passes around €40. Car rental for occasional use costs €25-35 daily, while purchasing a reliable used vehicle starts around €8,000.

What is life really like as an expat living in the Canary Islands—social life, infrastructure, climate, and integration?

Expat life in the Canary Islands offers exceptional quality of life with year-round temperatures of 18-24°C and over 300 sunny days annually.

The islands host large international communities, particularly German, British, and Nordic expats, creating natural social networks and support systems. Las Palmas and Santa Cruz offer cultural activities, international schools, and business networks, while resort areas provide leisure-focused lifestyles.

Infrastructure quality varies by location but generally meets European standards. Major towns have modern healthcare facilities, reliable internet (fiber optic widely available), and good road networks. Public transport connects main areas effectively, though rural locations may require private vehicles.

Integration is relatively easy due to established expat communities and Spanish tolerance for foreign residents. Learning basic Spanish accelerates integration, but English and German are widely spoken in tourist areas. Local Canarians are generally welcoming, though rural communities may be more traditional.

Professional opportunities exist in tourism, real estate, digital services, and international business, with growing remote work acceptance. The islands attract digital nomads through initiatives like RePeople in Gran Canaria, offering coworking spaces and networking events.

Healthcare is excellent and affordable, with both public and private options available. International schools serve expat families, while universities provide higher education opportunities. The relaxed island lifestyle emphasizes outdoor activities, family time, and work-life balance. It's something we develop in our Spain property pack.

If I wanted to rent out the property, how does that work for long-term versus short-term—what kind of returns can I expect, what are the legal rules, and what areas or property types perform best for each strategy?

Rental strategies in the Canary Islands offer different returns and requirements depending on your chosen approach.

Long-term rentals generate 4-7% gross annual yields with steady income and minimal management. Best performing areas include urban centers like Las Palmas and Santa Cruz, family neighborhoods, and locations with year-round local demand. Standard rental contracts last 5-11 months with tenant protection laws favoring long-term occupancy.

Short-term vacation rentals can achieve 7%+ gross yields in prime tourist locations, with properties in Costa Adeje, Maspalomas, and Playa de las Américas commanding €100-300+ nightly rates. Peak season (December-March, July-August) generates 60-70% of annual income.

However, new regulations effective July 2025 require vacation rental registration, technical safety inspections, and neighbor consent for apartment buildings. Many municipalities are limiting new vacation rental licenses to control tourism impact and protect local housing supply.

Property types performing best for short-term rentals include 1-2 bedroom apartments near beaches, villas with private pools, and properties with sea views or unique features. Long-term rentals favor larger family homes, apartments in residential areas, and properties near schools or business districts.

Professional property management companies charge 15-25% of rental income but handle marketing, guest services, cleaning, and legal compliance. Self-management requires significant time investment but maximizes returns for hands-on investors.

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.

Sources

1. Properstar - Canary Islands Properties for Sale
2. Canarian Weekly - Property Price Increases
3. InvestRopa - Spanish Property Investment Guide
4. Global Property Guide - Spain Market Data
5. Canary Immo - Rental Investment Guide
6. Lagares Abogados - Legal Buying Guide
7. Canarian Properties - Legal Pitfalls
8. InvestRopa - Best Areas Guide
9. My Spain Visa - Expat Living Guide
10. BnB Calc - Vacation Rental Regulations