Transactions and Prices for Land Recovering on the Canary Islands

26 August 2018

Transactions for land are once again taking off thanks to the housing market, particularly rentals. In the first quarter of 2018, 182 operations were carried out for 36 million euros, up 35% y-o-y.

The land market is once again taking off in the Canary Islands. The observation comes from data published by the Ministry of Development and is largely due to the growing demand for housing, especially for rental. In the first quarter of this year, the most recent available data, 182 urban land transactions were carried out on the Spanish archipelago, an increase of 29% over the previous year. The increase reached 10% with regards to the previous quarter.

The figure places the Canary Islands among the Spanish regions with the highest increase in land operations. When broken down by province, there was the same number of transactions in Las Palmas as in Santa Cruz de Tenerife, though the rebound in the eastern province was higher in relative terms, going up by 34% compared to 25%. These are the highest figures for land operations since 2009. In recent years, less than one hundred plots of land were being sold per quarter, according to the Ministry’s data. Before the crisis, nearly 1,000 plots of land were sold on a quarterly basis.

The transactions for land included a total area of 195,000 square meters, almost 20,000 more than a year before. The figure is similar to the 165,000 square meters transacted in the first quarter of 2008, although the crisis even saw a few years with high levels of square meters of land sold, such as 2016 when transactions were made on 463,900 square meters or 475,600 2014.

These operations, however, stem from construction records not always linked to housing.

Despite the improvement, the total amount of square meters sold continue to be well below those before the crisis, when sales exceeded one million square meters per quarter. However, the quantity of funds involved has shown a real recovery. The 182 transactions in the first quarter had a value of 36 million euros, 35.4% more than the previous quarter and 36.2% more than the previous year.

This upturn explains the rise in the housing prices of around 4-5% this year.

At the provincial level, the land in Las Palmas has greater value, since 91 transactions were closed for more than 20 million euros, while in Santa Cruz de Tenerife the same number of transactions was carried out for less than 16 million euros.

The last year that saw such a high level of sales was in 2009. Then, 282,200 square meters were sold for 36 million euros.

The quarter that saw the lowest value since the beginning of the crisis and to date was the first quarter of 2010. At the time, 72,000 square meters of land sold for a value of 12.5 million euros. The cost per square meter of land reached 195.6 euros in the first quarter, according to the Ministry of Development’s data.

The trend in land transactions in the Canary Islands in the first quarter is in tune with its growing real estate market, especially in city centres. These days, it is possible to see cranes and buildings under construction and land being prepared for new buildings in the cities in the Canaries. The new reality is still a far cry from the boom years. Experts believe that those records will never be reached again.

Original Story: – Silvia Fernández

Translation: Richard Turner