Foreigners Spent €463M On Canary Island Homes In H1 2015

3 November 2015 – ABC

The real estate market is being revived slowly, but surely in the Canary Islands. Most of this growth is due to foreign residents in the autonomous region, which have spent more than €460 million so far this year buying homes in the region. To put this amount into context, that figure is the highest seen in the last eight years. In fact, for example, it more than doubles the figures recorded in 2009, when the economic crisis had already taken hold in Spain.

The demand for apartments and homes is recovering but at a slow rate. According to statistics published by the Ministry of Development, in 2015, and specifically in the six months to June 2015,  9,560 homes were bought and sold in the Canary Islands: 4,909 in the province of Las Palmas and the remainder, 4,451 in the province of Santa Cruz de Tenerife. This reflects an increase compared with the fewer than 9,000 homes that were sold during the same period in 2014, the fewer than 7,600 that were sold in H1 2013 and the 7,650 that were sold in H1 2012. A positive trend for the Canary Islands’ economy, which is strengthened by the fact that the size of these real estate operations is also on the rise.

Data from the Department led by Ana Pastor reveals not only that the volume of transactions signed (by buyers of all nationalities) between April and June (almost €588 million) is the highest quarterly figure since Q3 2010, but also that the volume signed during the first half of 2015 (almost €1,100 million) represents the highest figure since H1 2010. Between January and June, house sales in the autonomous region amounted to €1,069.4 million, of which almost €545.5 million related to operations in the province of Las Palmas and around €524 million to transactions in the province of Santa Cruz de Tenerife.

The bulletin from the Ministry of Development also showed that the recovery in the real estate market in the autonomous region has reached an important segment of the market, i.e. that comprising foreigners. Overseas residents in the region were behind house purchases amounting to almost €462.3 million between January and June. These operations totalled just under €210 million during the first quarter of the year and just over €252.5 million during the second quarter. The last time this figure exceeded €252.5 million was in Q3 2007, i.e., just before the onset of the subprime mortgage crisis, when it reached €261.3 million. If we take this latest half year data as a benchmark, the €462.3 million spent represents the highest figure spent by foreign residents in the last eight years, i.e. since H1 2007, the year that marked the end of the boom and the beginning of the long years of hardship. (…).

These statistics also show that foreigners living in the autonomous region prefer to buy second-hand homes. More than €417 million of the €462.3 million spent by foreigners, i.e. more than 90%, was spent on second-hand apartments and homes. (…).

Land sales not increasing

However, another indicator clearly shows that the recovery of the real estate sector is not happening as quickly in the Canary Islands as in the rest of the country: sales of land. The latest data from Spain’s National Institute of Statistics (INE) show that whilst during the 8 months to August, 48,905 plots of land were sold in Spain, up by 10.5% compared with the same period in 2014; the comparable figure amounted to less than 1.5% in the Canary Islands, where just 1,257 plots were sold between January and August, an increase of just 19 (plots) compared with the previous year. At the height of the boom, 5,800 plots were sold in the autonomous region during the same period in 2007.

Original story: ABC

Translation: Carmel Drake