Nearly three in ten property purchases in both the Canary Islands and the Balearic Islands are made by foreign buyers, according to a report presented by Asufin at its VII Annual Congress. The study also reveals that the proportion of foreign purchasers reaches 28% in the Valencian Community and 22% in Murcia, while five autonomous regions remain below 4%, with Extremadura at just 1.58%.
The report highlights that investment purposes are the principal reason for taking out a mortgage in 65% of cases.
Recent data from notaries supports this trend: property prices in the Canary Islands have surged by 22%, and almost half of all rental properties are now being offered as holiday lets.
A limited supply of new housing
Asufin’s analysis shows that newly built homes represent only 15% of the overall market.
Of the nearly 48,000 housing transactions registered by the INE, just over 7,500 correspond to new construction permits, underlining the constrained supply of new-build properties.
Mortgage trends
The average interest rate on current mortgage approvals stands at 3.12%.
- Fixed-rate mortgages remain the cheapest, at 2.87%.
- Variable-rate loans are the most expensive, averaging 3.38%.
- Mixed mortgages, which have grown rapidly in response to steep interest-rate rises over the past two years, stand at 3.22%.
Mortgage payments now consume 35% of salaries
Due to high property prices and the growing cost of borrowing, mortgage repayments now account for an average of 35% of household income. The burden is far heavier for younger buyers:
- 58% of income for those up to 24 years old,
- 40% for the 25–35 age group.
This financial pressure has risen substantially since 2021, reflecting both the surge in property values and tighter lending conditions.
