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Why are the Canary Islands emerging as a prime destination for property investment in 2025? Is it the attractive rental returns, the thriving tourism sector, or the competitive pricing compared to other European markets? What makes this archipelago a compelling choice for investors? We frequently encounter these questions because we are actively engaged with local developers, real estate agents, and investors like you. Given the growing interest in this market, we've decided to compile our insights into a comprehensive article for everyone's benefit.
Our aim is to present a clear and compelling case for investing in the Canary Islands' real estate market, drawing from our firsthand experience and in-depth market knowledge.
If you feel we've overlooked an important aspect or wish to learn more, please don't hesitate to reach out (we respond very quickly). Your feedback enhances the quality of our content.
Finally, please remember that this is not financial or investment advice. Real estate investment involves inherent risks, and market conditions can change unexpectedly. We strongly recommend conducting thorough research and consulting with a qualified financial advisor before making any investment decisions.
1) The Canary Islands’ strong healthcare system makes it appealing for older property buyers
The Canary Islands are a top pick for older property buyers due to their excellent healthcare system.
One standout feature is the high ranking of local hospitals in both national and international assessments. For example, Candelaria Hospital in Tenerife was ranked 50th in Newsweek's World’s Best Hospital 2023 in Spain, showcasing the region's healthcare quality.
Gran Canaria is particularly noted for its modern medical facilities. The island boasts hospitals equipped with state-of-the-art technology, ensuring residents and visitors have access to a wide range of specialized medical services.
Adding to the appeal is the presence of well-regarded hospitals and clinics. Candelaria Hospital is a reference center for liver transplants and offers specialized services like Palliative Care, Cardiology, Pneumology, and Paediatrics.
Hospitals such as Maspalomas and Vegueta in Gran Canaria are also recognized for their excellence in various medical specialties, making the islands a reliable choice for healthcare.
Sources: Euro Health Observatory, DA News, Gran Canaria Wellness
2) The Canary Islands' booming film industry boosts demand for short-term rentals
The Canary Islands are buzzing with international film productions, hosting a record 13 feature films in Tenerife in 2023.
Why the sudden interest? Well, the islands offer stunningly diverse landscapes and competitive costs, making them a favorite for German, Spanish, and British filmmakers. Imagine shooting a scene with a volcanic backdrop in the morning and a tropical beach in the afternoon—all without leaving the island.
But it's not just the scenery that's drawing filmmakers. The 'Ciudad del Cine' project in Adeje is a game-changer, boosting local infrastructure to support the film industry. This initiative is part of a broader strategy to diversify the local economy, making the Canary Islands a film-friendly zone.
And let's talk numbers. The Canary Islands offer one of Europe's best tax rebate systems, with up to a 50% rebate for international productions. This is a huge draw for filmmakers looking to stretch their budgets further than they could elsewhere in Europe.
The economic ripple effect is hard to ignore. The film industry is pumping over €100 million into the local economy each year, driving up demand for temporary accommodations. Film crews are filling up short-term rentals, which means local property owners are seeing a nice boost in income.
So, if you're considering buying property here, know that the film industry is not just a passing trend. It's a growing sector that's increasingly influencing the local real estate market, especially in terms of short-term rentals.
Sources: Canarian Weekly, Screen Daily, Glass Frog Productions
We have made this infographic to give you a quick and clear snapshot of the property market in Spain. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) With year-round festivals, the Canary Islands attract tourists, boosting rental demand
The Canary Islands are buzzing with tourists, especially during their vibrant festivals.
In 2024, the islands saw 18 million visitors, with nearly 14 million being international tourists. This influx not only surpassed pre-pandemic numbers but also highlighted a strong recovery and growing interest in the region.
During the holiday season, occupancy rates skyrocketed to an average of 95%. In Las Palmas de Gran Canaria, hotels were bustling, with an average occupancy of 93% during the carnival. Santa Cruz de Tenerife wasn't far behind, with hotels seeing over 90% occupancy during the same period.
The Canarian carnivals are a magnet for tourists from Sweden, Spain, Britain, Germany, Italy, and Norway. These lively events not only draw crowds but also give a significant boost to the local economy.
With the influx of visitors, there's a noticeable increase in rental demand, making it a prime time for property owners. The islands host numerous festivals and events throughout the year, increasing tourist traffic and rental demand.
Sources: Turismo de Islas Canarias, Isla Guru
4) The Canary Islands' warm climate all year makes it easy to attract tourists and renters
The Canary Islands boast a warm climate all year round, making them a magnet for tourists and potential renters.
In 2023, the islands saw their warmest and driest year since 1961, with temperatures averaging 20.1 degrees Celsius. This consistent warmth, typically ranging from 18 to 24 degrees Celsius, is perfect for those who crave pleasant weather throughout the year.
Sunshine is abundant here, nurturing a lush subtropical landscape and playing a vital role in drawing tourists. This sunny climate is a major reason why the Canary Islands are such a popular tourism destination.
In 2023, the islands welcomed over 16 million visitors, with a significant number coming from the UK. This influx is supported by excellent connectivity, thanks to 53 airlines and six international airports linking the islands to major European cities.
Sources: Canarian Weekly, One Planet Network, Travelon World
5) The Canary Islands attract marine researchers and academics, creating demand for housing
The Canary Islands are a key destination for marine research and conservation, attracting professionals and academics from around the world.
One major draw is the Oceanic Platform of the Canary Islands (PLOCAN), a cutting-edge facility backed by the Spanish and Canary Islands governments, along with the European Regional Development Fund. This shows a strong commitment to marine research infrastructure in the region.
Programs like the Marine Institute’s Eoin Sweeney Scholarship are also making waves. They offer research training opportunities and place researchers at PLOCAN, creating a bridge between Ireland and Spain and boosting marine biology and conservation efforts.
International partnerships are another highlight. PLOCAN’s multi-platform coastal and ocean observatory provides real-time ocean observations, collaborating with global systems for environmental monitoring and instrument testing.
These initiatives make the Canary Islands a thriving hub for marine science, drawing in experts who may also be in the market for local housing.
Sources: Marine Institute, EuroGOOS
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6) In the Canary Islands, you’ll enjoy significant tax benefits thanks to their unique tax regime
The Canary Islands offer a unique tax regime that makes property investment particularly attractive.
One standout feature is the reduced VAT rate, known locally as IGIC, which is set at just 7%. This is a big deal compared to the mainland Spain's 21% VAT, making property transactions here much more appealing.
For businesses, the Canary Islands have a Special Economic Zone (ZEC) where the corporate tax rate is a mere 4%. This low rate not only benefits companies but also creates a thriving economic environment that indirectly benefits property investors.
Investors interested in renewable energy projects can enjoy some sweet tax incentives. In Santa Cruz de Tenerife, for example, there are subsidies for self-consumption, and you can snag a 50% discount on IBI for five years. This makes properties with renewable energy solutions a smart financial move.
Another perk is the lower property transfer tax rates compared to mainland Spain, which helps reduce the overall tax burden for property investors. Plus, the availability of double taxation treaties is a boon for foreign investors, making the region even more enticing.
Sources: Adrianople Group, Solarama, Agencia Tributaria
7) The Canary Islands are easy to reach for international visitors thanks to their great airports and ports infrastructure
The Canary Islands are a hotspot for international travelers, thanks to their excellent infrastructure.
With airports like Gran Canaria and Tenerife South handling millions of passengers, the islands are more accessible than ever. In 2023, they saw a 48.4 million passenger influx, marking an 11.4% jump from the previous year. This surge highlights the islands' growing appeal and ease of access for global visitors.
Beyond air travel, the islands boast a robust sea network. Ferries operated by Fred Olsen and Naviera Armas connect the Canary Islands to Europe and Africa. These ferries are crucial, not just for tourists but also for moving cargo, which bolsters both tourism and commerce.
The local government has been proactive, investing heavily in infrastructure. This has fueled economic growth, with the Canary Islands' GDP projected to rise by 2.6% in 2024. Such growth is largely driven by tourism and foreign investments, making the islands an attractive spot for property buyers.
Improvements in road networks and public transport have made it even easier for visitors to explore the islands. Whether you're looking to relax on the beach or delve into local culture, getting around is a breeze.
Sources: Travelon World, BBVA Research, Mister Ferry
8) The strong expat community in the islands means you’ll always find demand for long-term rentals
The Canary Islands are becoming a hotspot for expats, with 14,829 new foreign residents in 2023.
This influx has led to a 4.71% rise in the foreign population, creating a vibrant expat community. With more people moving in, there's a noticeable demand for long-term rental properties, especially in areas favored by newcomers.
Families are also seeking international schools, which have seen a surge in demand. This trend highlights the growing number of expats settling down and looking for educational options that cater to their needs, reinforcing the idea of a stable expat presence.
Rental prices are climbing, with the average monthly rent hitting €1,110 in June 2023, marking an 8% increase from the previous year. This rise in rental costs underscores the consistent demand for housing, particularly in expat-friendly neighborhoods.
Expats in the Canary Islands are quite content, as 84% report happiness according to the Expat Insider 2024 survey. Spain's high ranking, 4th overall, suggests that many expats are likely to stay long-term, further fueling the rental market.
The islands' strong expat community is a key factor in the ongoing demand for long-term rentals, making it an attractive option for property investors.
Sources: DA News, Moving to Spain, InterNations
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.
9) The Canary Islands are boosting digital infrastructure, attracting tech-savvy investors and residents
The Canary Islands are becoming a hotspot for tech enthusiasts, thanks to major investments in digital infrastructure.
In 2025, the government committed 33.3 million euros to boost digitalization, including projects like the Iris Network and a submarine cable connecting Gran Canaria to Cádiz. This is part of a broader effort to enhance data transmission and connectivity.
Recently, the 2Africa subsea cable, the world's largest submarine cable, landed in the Canary Islands, significantly improving internet speeds for locals and businesses. The Canary Islands Digital Innovation Hub (CIDIHUB), established in 2024, is also playing a key role by offering resources for digital transformation in sectors like tourism and ICT.
The region is also partnering with tech giants like Google, which is using a data center in ITER to strengthen connections with Africa. This collaboration is boosting the islands' reputation as a tech-friendly destination.
Thanks to initiatives like the Canarias Latam Tech program, the Canary Islands are now a magnet for tech startups and digital nomads. The islands offer not just cutting-edge infrastructure but also an appealing quality of life that attracts tech-savvy individuals.
These developments are making the Canary Islands an attractive option for those looking to invest in property, especially if you're interested in being part of a growing tech community. The islands are investing in digital infrastructure, making them more attractive to tech-savvy investors and residents.
Sources: Vodafone, DIH World, Canary Islands Hub, Tenerife Weekly
10) You’ll enjoy lower utility bills in the Canary Islands thanks to their investment in renewable energy
The Canary Islands are making big moves in renewable energy, which could mean lower utility costs for property owners.
In 2024, the islands approved several projects, including a 9.2-MW wind farm in Lanzarote, aiming for 60% renewable energy by 2030. This is part of a larger plan to hit 100% by 2050.
Last year, the Canary Islands saw a 7.1% boost in renewable energy production, with wind power making up 16.2% of the energy mix. The government is also working with Energía Bonita to install solar panels on schools, which will provide clean energy to 700 families.
These efforts are backed by government incentives like tax credits and subsidies, making it easier for property owners to invest in renewable systems. As more renewable energy is generated, the islands rely less on fossil fuels, which could lead to cost savings for property owners.
Sources: Total HSE, Wikipedia, Renewables Now, Clean Energy Islands
11) The government’s push for sustainable tourism boosts property values in eco-friendly areas
The Canary Islands are boosting property values by promoting sustainable tourism.
In 2023, the local government introduced a tourist tax to manage visitor numbers and reduce environmental impact. This tax aims to fund sustainable tourism and preserve the islands' natural beauty. By doing so, the government shows its commitment to sustainability, aligning with global efforts to combat climate change.
They also proposed a Law on Sustainable Management of Tourist Accommodation, which requires properties to meet minimum sustainability standards. This ensures that holiday homes and tourist accommodations contribute positively to the environment and community. Such policies not only protect the islands' natural resources but also make eco-friendly developments more attractive to investors and buyers.
Eco-friendly homes and energy-efficient developments are on the rise, especially in Lanzarote and La Palma. These areas benefit from tax incentives, encouraging investment in sustainable properties. As a result, property values in these regions have increased, reflecting a growing demand for environmentally conscious living.
The combination of government initiatives, regulatory frameworks, and market trends highlights the importance of sustainable tourism in enhancing property values. The local government actively promotes sustainable tourism, which can enhance property values in eco-friendly developments.
Investors are increasingly drawn to these eco-friendly developments, recognizing the potential for long-term value growth. The Canary Islands' focus on sustainability is not just a trend but a strategic move to ensure the islands remain attractive to both tourists and property buyers.
Sources: Green Outdoors, Destinations by LeadingRE, Turismo de Islas Canarias, Idealista
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12) The Canary Islands' lively nightlife attracts young tourists and renters
The Canary Islands are buzzing with vibrant nightlife and entertainment, attracting younger tourists and renters.
In 2023, the islands welcomed 8.74 million visitors in just the first half of the year. This upward trend continued into 2024, with foreign tourist arrivals growing by 12.4% by June, showing a strong interest in the region.
Gran Canaria is a hotspot with bars open until 2am and clubs that keep the party alive until 6am. Playa del Inglés is a favorite for its swanky nightclubs, while Lanzarote offers a chill vibe with lively spots in Puerto Del Carmen. Tenerife, on the other hand, is famous for its bustling nightlife in Playa de las Américas.
Tourism is a big deal for the Canary Islands' economy, contributing significantly to the GDP and creating jobs. In 2024, hotel and apartment revenues hit EUR2.613 billion in the first half of the year, a 15.2% jump from 2023. This highlights how crucial the nightlife scene is for attracting visitors and supporting local businesses.
Sources: Thomas Cook, Canarian Weekly, The Germany Eye
13) The Canary Islands' rich cultural heritage draws tourists interested in history and culture
The Canary Islands boast a vibrant cultural heritage that draws tourists from around the globe.
One of the standout events is the Carnival of Santa Cruz de Tenerife, celebrated as one of the largest and most colorful carnivals in the world. Every February or March, the streets come alive with parades, music, and extravagant costumes, creating an atmosphere that captivates visitors.
In September, the Fiestas de la Virgen del Pino takes center stage, honoring the island's patron saint. This festival features religious processions and traditional Canarian cuisine, offering a taste of local culture that attracts both locals and tourists alike.
Beyond festivals, the Canary Islands are rich in history, with numerous sites and museums that draw in visitors. Gran Canaria's Museo Canario, for example, is a popular destination, showcasing the islands' deep historical roots and cultural heritage.
The recognition of Risco Caído and the Sacred Mountains of Gran Canaria as a UNESCO World Heritage Site highlights the cultural and natural significance of the region, appealing to those interested in exploring both aspects.
These cultural attractions, from lively festivals to historical landmarks, make the Canary Islands a must-visit destination for culture enthusiasts.
Sources: Canarian Weekly, GIDE, Gran Canaria Blog
14) The Canary Islands' duty-free status boosts business appeal, enhancing commercial property investment potential
The Canary Islands are a duty-free zone, making them a hotspot for businesses and commercial property investments.
Thanks to their unique tax setup, the islands boast lower import taxes and VAT rates than mainland Spain. For example, the Canary Islands' General Indirect Tax (IGIC) is just 7%, while mainland Spain and the Balearic Islands have a VAT rate of 21%.
This tax advantage means lower costs for both consumers and businesses, which boosts economic activity. More businesses are setting up shop here, especially with the surge in tourism and services in early 2024.
The real estate market is buzzing with new residential and commercial projects, enhancing the islands' allure and offering fresh investment opportunities. There's a growing demand for high-end villas and exclusive resorts, particularly in Tenerife and Gran Canaria.
This trend indicates a rising need for office and retail spaces in key Canary Islands cities. The islands' duty-free status and thriving economy make them a prime spot for commercial property investments.
Sources: CaixaBank Research, Taxually, Destinations by LeadingRE, BBVA Research
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.