150
150

INE: Lack of Rental Homes Boosts House Purchases in Canary Islands

12 May 2018 – Canarias 7

During the first quarter of the year, 6,373 homes were sold in the Canary Islands, up by 20% compared to the same period a year earlier, and 8 percentage points higher than the national average. Every day between January and March, 70 homes were sold, 12 more per day than in 2017. Moreover, operations involving new build homes grew by more than those involving second-hand homes for the first time.

The lack of rental homes in the Canary Islands is boosting the volume of house sales in the archipelago above the national average. And that is because buying a flat is the only way of securing a home in certain areas of the archipelago, according to warnings from real estate experts.

Data published on Friday by Spain’s National Institute of Statistics (INE) confirm the trend in the Canary Islands’ real estate market. During the first quarter of the year, 6,373 homes were sold on the islands, which represented an increase of 20% with respect to the previous year. Every day between January and March, 70 homes were sold, 12 more per day than in 2017.

During Q1 2018, 1,001 more operations were closed in the Canary Islands than during the same quarter last year, according to the Statistics for the Transmission of Property Rights published by INE. At the national level, the increase was half that figure, 12%: between January and March, 128,348 homes were sold in Spain compared to 114,965 a year earlier.

In terms of the type of homes sold in the Canary Islands, for the first time since the outbreak of the crisis, the number of new home sales grew by more than the number of second-hand home sales. Operations involving new builds are fewer in absolute terms but they are growing more rapidly. Between January and March, 1,333 new homes were sold in the Canary Islands, up by 22% compared to the same period in 2017.

Meanwhile, 5,040 second-hand homes were sold, up by 17.8% compared to a year before, according to data from INE.

Price rises

House prices are going to rise by 5% on average this year, i.e. by almost twice the rate they grew by in 2017, according to forecasts from BBVA Research reflected in its magazine, the Real Estate Situation in Spain.

Similarly, the bank’s research department predicts that the volume of operations will reach 570,000 this year, up by 7% compared to 2017. In terms of new home permits, the forecast is that 93,000 will be signed by the end of the year, up by 15% compared to 2017.

In general, the potential demand for housing is expected to grow by between 1 and 1.4 million over the next 10 years, which translates into an annual average of between 95,000 and 135,000 households.

Original story: Canarias 7 (by Silvia Fernández)

Translation: Carmel Drake