Housing prices in the Canary Islands are now mirroring the highs seen during the 2008 real estate bubble. As of the second quarter of 2023, the average valuation for free-market housing stood at 1,733.4 euros per square meter, nearing the historical peak of 1,841 euros per square meter recorded in the second quarter of 2008.
The price per square meter for new housing in the archipelago had surpassed the 1,700 euros mark since the third quarter of 2006, maintaining this level until the first quarter of 2009. This was followed by a decline, bottoming out at 1,257 euros per square meter in the first quarter of 2014. Since then, there has been a steady recovery, culminating in the current figure of 1,733.4 euros per square meter as of the third quarter of this year.
This recent valuation marks an 8.2% increase in housing prices, a growth rate second only to the Balearic Islands. This uptrend is part of a broader nationwide increase, where the average housing value has reached 1,812.4 euros per square meter, the highest since late 2010.
Breaking down the data for the Canary Islands, provided by the Canary Islands Statistics Institute (Istac), the value for housing aged five years or less is 1,888.2 euros per square meter, while for older housing, it stands at 1,730.8 euros.
In terms of geographical distribution, the average price for new housing in Las Palmas province during the third quarter of 2023 was 1,787.7 euros, while in Santa Cruz de Tenerife province it was 1,678.9 euros. The price for subsidized housing in the Canary Islands has reached 1,126.5 euros per square meter, surpassing the national average of 1,164.6 euros. This is the highest since the second quarter of 2012, when it was 1,171.2 euros per square meter.
Canary Islands Property Market Slows
However, the real estate market is also showing signs of a slowdown. Mortgage signings in the Canary Islands have dropped by 32.6% in September compared to the same month last year, a more significant decline than the 29.64% national average. The total number of mortgages recorded in September was 955, according to the National Statistics Institute (INE), a notable decrease compared to previous periods.
In terms of capital, 112.61 million euros were lent for mortgages on dwellings in September in the Canary Islands, a 35.39% decrease from the previous year. When compared to August, there was a 29.76% reduction in capital lent.
Overall, 1,349 mortgages were constituted in the region during this period, with a total capital of 357.42 million euros. This included 37 on rural properties and 1,312 on urban properties, of which 955 were on dwellings, 10 on plots, and 347 on other types of properties.
Additionally, there were 64 operations involving changes in lending entities (subrogations to the creditor) and six cases of mortgage holder changes (subrogations to the debtor). Out of 386 mortgages with modified conditions, 316 were due to novation. In the same period, 1,865 property loans in the Canary Islands were cancelled, including 1,368 for dwellings, 55 for rural properties, 426 for urban properties, and 16 for plots of land.