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What is happening in the Canary Islands’ real estate market? Are prices on the rise or decline? Is Tenerife still a prime location for international buyers? How are local government policies shaping real estate taxes and regulations in 2025?
These are the questions we hear every day from industry experts, potential buyers, and sellers, from Gran Canaria to Lanzarote and beyond. Maybe you’re curious about these trends too.
We understand this because we maintain close connections with local professionals and individuals like you, exploring the Canary Islands real estate market daily. That’s why we crafted this article: to deliver clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to reach out with your thoughts or comments, and we’ll strive to enhance this content for you.
1) Canary Islands property prices will rise moderately due to limited supply and high demand
In recent years, the Canary Islands have experienced a steady increase in residential property prices. In 2023, property prices rose by 7.7%, followed by a 7.1% increase in 2024, reaching an average of €1,678 per square meter. This trend indicates a consistent upward trajectory in property values.
The limited supply of new housing developments plays a significant role in this price increase. The geographical constraints of the islands, along with strict zoning laws and building restrictions, limit the expansion of housing supply. This constrained supply, coupled with high demand, naturally leads to higher property prices.
Demand for properties in the Canary Islands is driven by several factors. The region's population has grown, with a notable influx of tourists and foreign buyers attracted by the islands' warm climate and scenic beauty. Additionally, the rise in remote working trends has led more people to relocate to desirable climates like the Canary Islands, further increasing demand for residential properties.
Sources: Maspalomas24h, DA News, Tenerife24
2) Rents in Canary Islands' tourist hotspots will rise due to high demand from seasonal visitors
Rental prices in the Canary Islands have surged over the past decade, making it a hot topic for potential property buyers.
In Las Palmas de Gran Canaria, for instance, prices jumped from €7.2/m² in 2014 to €13.1/m² in 2024. Meanwhile, Santa Cruz de Tenerife saw a similar trend, with prices doubling from €5.9/m² to €11.8/m² over the same period. This rise is largely due to the islands' growing popularity among tourists.
The Canary Islands had a record-breaking year in 2023, attracting 5.7 million British tourists and a total of 14.1 million international visitors. By June 2024, the islands welcomed 1,257,228 tourists, an increase of 8.86% from the previous year, with tourist spending reaching a whopping 1.43 billion euros.
January 2024 saw the occupancy rate soar to 83%, a stark contrast to the 37% recorded in January 2021. This indicates a strong demand for short-term rentals, which is further evidenced by the rise in active listings on platforms like Airbnb, from 32,084 in January 2021 to 46,591 in January 2024.
With such high demand, it's no surprise that rental prices are climbing. The Canary Islands are becoming a prime destination for seasonal visitors, driving up the need for accommodation and, consequently, rental costs.
For those considering buying property here, it's essential to understand that the rental market is thriving, thanks to the influx of tourists and the islands' appeal as a holiday hotspot.
Sources: TravelOn World, PriceLabs, Canarian Weekly
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) Luxury property prices in the Canary Islands will rise significantly due to international buyer interest
The luxury property market in the Canary Islands is seeing a significant price hike, mainly due to international buyers.
In 2022, foreigners accounted for 52% of all home transactions in the Canary Islands, with young families and wealthy individuals particularly interested in luxury homes. This trend has continued into 2024, with property prices in Santa Cruz de Tenerife and Las Palmas rising by 16.6% and 12.3%, respectively.
One reason for this surge is the growing number of wealthy individuals worldwide looking for second homes. The Canary Islands offer favorable tax incentives for foreign property investors, making them an attractive option. The islands' subtropical climate and natural beauty also boost their popularity as a luxury travel destination.
The limited supply of high-end properties in prime locations is another key factor. The scarcity of luxury homes compared to the high demand is pushing prices up. Historical data shows that luxury property prices have been steadily increasing over the years, hitting a 10-year record in 2023.
With the Canary Islands becoming a hotspot for luxury real estate, international buyers are keen to invest. The islands' unique appeal and strategic location make them a prime choice for those seeking exclusive properties.
Sources: Statista, The Golden Partners, Idealista, Arum Group
4) Lanzarote will see a slight rise in rental yields as interest in short-term rentals grows
Lanzarote is buzzing with tourists, welcoming over 3.1 million visitors in 2023.
This surge in tourism has sparked a boom in short-term rentals, especially in hotspots like Montaña Roja. Here, 153 Airbnb listings are available, and they’re not just sitting empty. These properties are pulling in impressive numbers, with a median property price of €315,000 and an annual revenue of €43,693. It’s clear that the short-term rental market is thriving.
What’s driving this success? Well, short-term rentals in Lanzarote are enjoying higher occupancy rates. For instance, 3-bedroom properties have a median occupancy rate of 67%, which is higher than what you’d typically see with long-term rentals. This trend shows that tourists are leaning more towards short-term stays rather than traditional hotels.
With more tourists choosing short-term rentals, rental yields are naturally on the rise. This shift is particularly noticeable in areas that are popular with visitors, where the demand for short-term accommodations is outpacing that for long-term options.
Investors are taking note, as the potential for returns in the short-term rental market is becoming increasingly attractive. The combination of high occupancy rates and solid annual revenues makes Lanzarote a promising spot for property investment.
As the island continues to draw in more visitors, the interest in short-term rentals is expected to keep growing, leading to a slight increase in rental yields. This makes it an exciting time for those looking to invest in Lanzarote’s property market.
Sources: Airbtics, Gazette Life, Skift
5) Tenerife's southern region will experience increased demand as new luxury developments attract high-net-worth individuals
The southern region of Tenerife is set to see a surge in demand, primarily due to new luxury developments that are attracting high-net-worth individuals. In recent years, property prices in the Canary Islands, including Tenerife, have shown resilience, with a notable 7.7% increase in 2023. Although a slight moderation was expected in 2024, the luxury segment remains strong.
Several luxury real estate projects are underway, such as the Villa de Erques, a five-star hotel in Guía de Isora, and exclusive villas in Costa Adeje. These developments offer high-end amenities like infinity pools and panoramic ocean views, catering to the preferences of affluent buyers. Real estate agencies have reported growing interest from wealthy individuals, despite an overall decrease in sales, indicating a robust demand in the luxury market.
Demographic studies reveal a significant influx of affluent buyers, driven by the region's appeal and economic opportunities. The south of Tenerife has experienced substantial population growth, largely due to its thriving tourism sector. This growth has made the area attractive to both local and foreign workers, further enhancing its appeal to high-net-worth individuals.
Sources: Canarian Weekly, Le Figaro Properties, Canarian Weekly, 4Life Properties, Properstar
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6) Foreign retirees will increasingly buy properties in the Canary Islands for its appealing climate
The Canary Islands are becoming a hotspot for foreign retirees looking to buy property.
In 2024, 33.49% of property sales in Santa Cruz de Tenerife were to foreigners, showing just how attractive the area has become. The islands ranked third in foreign property acquisitions, with Germans leading the charge as the primary foreign buyers. This trend highlights the growing interest in the region.
One of the biggest draws is the Canary Islands' warm, sunny climate, which is perfect for retirees. While specific surveys aren't mentioned, the islands are often talked about as ideal retirement spots because of their year-round sunshine. This climate not only makes for a pleasant living environment but also offers health benefits for older adults.
Financially, the Canary Islands are appealing due to their attractive tax benefits and lower property taxes compared to mainland Spain. This makes the region a smart choice for retirees wanting to get the most out of their investments. The rise in real estate agencies focusing on foreign buyers, especially those interested in luxury and sustainable homes, further underscores the islands' allure.
With more retirees eyeing the Canary Islands, the local real estate market is adapting to meet this demand. The focus is on providing properties that cater to the tastes and needs of international buyers, making it easier for them to settle in and enjoy the island life.
Sources: DA News, Destinations by LeadingRE, Canarian Weekly
7) Tenerife will see higher rental yields as it becomes a favored spot for long-term stays
In recent years, Tenerife has become increasingly popular among digital nomads, thanks to its favorable climate, high-speed internet, and a growing number of coworking spaces. This trend has been particularly noticeable in 2023 and 2024, with more remote workers choosing the island for long-term stays.
The demand for long-term rentals has been on the rise, driven by both digital nomads and a growing expatriate community. This has led to higher occupancy rates in long-term rental properties, which in turn contributes to increased rental yields. The property market in Tenerife has shown stable value growth, with rental yields from short-term rentals already high, indicating a promising outlook for long-term rentals as well.
Additionally, the Canary Islands Government has introduced initiatives to support housing access, such as rental assistance programs. These programs help facilitate long-term stays by making housing more affordable, further boosting demand for long-term rentals. Moreover, the increased flight connectivity announced for 2025 is expected to bring more visitors to the island, potentially increasing the demand for long-term accommodations.
Sources: Canarian Weekly, Canarian Weekly, Hello Canary Islands, Globihome
8) Property prices in less touristy Canary Islands areas will slightly decline as demand moves to more popular regions
In recent years, we've seen a noticeable shift in property demand within the Canary Islands. While the islands as a whole have been growing in popularity, certain areas are experiencing different trends. For instance, the Balearic Islands, another major tourist destination in Spain, saw a 13.8% decrease in property sales in early 2024. This suggests a broader trend where demand is moving towards more popular regions.
In the Canary Islands, cities like Las Palmas have experienced a moderate decline in property sales. This could indicate that the market is adjusting, with more properties being listed in less popular areas. Meanwhile, Santa Cruz de Tenerife has seen higher average home prices compared to Las Palmas, suggesting that less popular regions might be more vulnerable to price declines as demand shifts.
Tourist hotspots such as Costa Adeje and Playa de las Américas in Tenerife, along with Maspalomas in Gran Canaria, continue to attract strong demand. This is driving up property prices in these areas, potentially reducing interest in less touristy regions. Additionally, the Canary Islands are experiencing rapid population growth, particularly in developed regions like Tenerife and Gran Canaria, which could lead to a slight price decline in less touristy areas.
Sources: CaixaBank Research, Destinations by LeadingRE
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9) Rental yields in Gran Canaria will drop due to an oversupply of rental properties
In recent years, Gran Canaria has been experiencing a shift in its rental market dynamics. One of the key factors contributing to this change is the rising number of new rental property developments. Over the past decade, the Canary Islands have seen a significant increase in rental costs, primarily driven by demand. However, new developments are being constructed, which could potentially lead to an oversupply of rental properties.
Additionally, there has been an increase in construction permits issued for residential properties across the Canary Islands. Although specific data for Gran Canaria is not available, this trend suggests a potential oversupply in the rental market. As more properties become available, landlords may face increased competition, which could lead to a stabilization or even a decline in rental prices.
Reports from real estate agencies indicate higher vacancy rates in cities like Las Palmas de Gran Canaria, where long-term rentals have declined significantly. This trend, coupled with the rise of short-term rentals, suggests a shift in the rental market dynamics that could affect long-term rental yields. Increased competition among landlords might lead to rental incentives, further impacting rental yields.
Sources: Canarian Weekly, DA News
10) Property values in Fuerteventura's coastal towns will increase as they gain popularity for remote work setups
Fuerteventura's coastal towns are becoming hotspots for remote work, leading to a likely increase in property values.
Why? Well, there's a growing demand for homes that cater to remote work. Towns like Corralejo are seeing more coworking spaces pop up, offering flexible and affordable work environments for remote workers. This makes the area even more appealing for those looking to balance work and leisure.
Fuerteventura is attracting more remote workers, thanks to its sunny climate and stunning beaches. The island's coworking scene is expanding, especially in Corralejo and El Cotillo, where high-speed internet and shared workspaces are readily available. This setup is a dream for digital nomads who want a mix of productivity and paradise.
Property market reports are showing a rise in property prices in these coastal areas. The demand for remote work-friendly homes is a big driver, as more digital nomads flock to the island. Real estate agencies are noticing a surge in inquiries for properties in these towns, signaling a growing interest.
For those considering a move, the combination of a laid-back lifestyle and modern work facilities is hard to resist. The island's charm, coupled with its evolving infrastructure, is making it a top choice for remote workers. As more people discover this, property values are expected to climb.
So, if you're thinking about buying property in Fuerteventura, now might be the time. The island's unique blend of work and play is drawing in a new wave of residents, and the property market is responding accordingly.
Sources: Fuerte Remote, Hakoit
11) Fuerteventura's rental yields will remain stable as demand aligns with rental property supply
Fuerteventura is poised to maintain stable rental yields as the demand for rental properties aligns with the available supply. This balance is supported by several key factors that have been observed over the past few years.
Firstly, the island has experienced a significant rise in tourism, which has been a major driver of rental demand. In 2023, tourist occupancy rates stabilized at around 85% during the peak months, indicating a strong and consistent influx of visitors. This trend is expected to continue, bolstering the rental market. Additionally, the growing expatriate community, attracted by Fuerteventura's quality of life and economic stability, further contributes to the steady demand for rentals.
Moreover, property prices in Fuerteventura have been on the rise, reflecting the increasing interest in both residential and tourist properties. This trend is particularly evident in areas like Maspalomas, where property prices for 3-bedroom apartments range from €225,000 to €269,000. The local government's initiatives to promote tourism and investment have also played a crucial role in supporting the rental market by improving infrastructure and facilitating foreign residency.
While the supply of new homes is limited due to global inflation and higher construction costs, the demand in the secondary market remains robust. This equilibrium between supply and demand is a key indicator of stable rental yields. Furthermore, low vacancy rates in rental properties underscore the strong demand for housing, ensuring that rental yields remain stable.
Sources: Canarian Weekly, Maspalomas 24h, Airbtics
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12) Digital nomads will boost demand for flexible living spaces in the Canary Islands' real estate market
In recent years, particularly in 2023 and 2024, the global community of digital nomads has been expanding rapidly. This growth is largely due to technological advancements and the increasing availability of remote work opportunities. As more people embrace this lifestyle, they seek out locations that offer both reliable internet and appealing lifestyle amenities.
The Canary Islands have become a popular destination for these remote workers. The region has seen a significant increase in coworking spaces and co-living solutions, with the Canary Association of Coworking Spaces reporting a growth rate of 10% per month in remote workers. This infrastructure development supports the rising demand for flexible living spaces, which are essential for digital nomads who often prefer short-term or adaptable housing arrangements.
Moreover, the Canary Islands have experienced a notable rise in tourist numbers, from 11.5 million to around 16 million per year over the past decade. This influx includes both traditional tourists and remote workers, further driving the demand for flexible housing options. The short-term rental market has also grown rapidly, intensifying competition for housing in areas favored by digital nomads.
Additionally, the Canary Islands government has actively invested in attracting more digital nomads, including a €700,000 investment in coworking spaces and other infrastructure. This governmental support, combined with the islands' pleasant climate and reliable internet, makes the Canary Islands an attractive choice for digital nomads, thereby impacting the real estate market by increasing the demand for flexible living spaces.
Sources: Allwork.Space, Hello Canary Islands, Allwork.Space
13) Rents in Canary Islands' urban areas will slightly decrease as housing supply increases
Urban areas in the Canary Islands are seeing a boost in housing supply, thanks to recent developments.
Back in 2023, the region registered nearly 11,000 new homes, the highest number since 2015. This construction boom was a direct response to the growing demand for housing, which had been a pressing issue for some time.
The regional government stepped in with a massive €4 billion housing initiative. This plan included public housing projects, especially in places like Tenerife, aiming to increase both public and private housing availability. This proactive approach is reshaping the housing landscape in the Canary Islands.
Economic reports also show a rise in investment in housing infrastructure. The Banco de España noted that tighter regulations on tourist rentals in certain areas could help balance supply and demand. New housing developments are quickly being snapped up, indicating a robust supply.
These changes are expected to impact the rental market. With more homes available, rents in urban areas might see a slight decline, offering potential buyers and renters more options.
For those considering a move or investment, the Canary Islands' housing market is becoming more accessible, thanks to these strategic developments.
Sources: Canarian Weekly, Banco de España
14) Rural rents in the Canary Islands will stay stable due to fewer tenants being attracted
In the Canary Islands, rural spots like El Hierro and Fuerteventura have low population densities, with just 40.79 and 62.34 people per km².
This sparse population means fewer folks are hunting for rentals, which keeps rents from skyrocketing.
Back in 2023 and 2024, rental prices in these rural areas stayed pretty steady. The reason? Less demand compared to bustling urban zones where everyone seems to be flocking.
Demographic studies from that time showed that not many people were moving to the countryside. This slow growth in population helped keep rental prices from shooting up.
Reports also pointed out that job opportunities were scarce in these rural parts, making them less appealing to potential renters.
This lack of jobs meant even less demand for rentals, which played a big role in keeping prices stable.
Sources: Wikipedia, ETH Zurich
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Spain. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
15) Rents in Canary Islands' coastal areas will rise due to demand from remote workers
The Canary Islands have become increasingly popular among remote workers, leading to a rise in demand for housing in coastal areas. This trend is largely driven by the significant increase in remote job opportunities, as seen in Las Palmas de Gran Canaria, where there were 273 fully remote job postings in 2023 alone.
The excellent internet infrastructure in the Canary Islands, with broadband speeds reaching up to 1 Gbps and extensive optical fiber coverage, makes it an ideal location for remote work. This reliable connectivity is a key factor attracting remote workers to the islands.
Additionally, the introduction of the teleworking visa under Spain's *Ley de Startups* has made it easier for digital nomads to live and work in the Canary Islands. This visa allows remote workers to stay for up to three years, further increasing the demand for housing.
Sources: Hello Canary Islands, Club Swan, AllWork.Space
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.