Foreign Buyers Push Locals Out of Housing Market in Tenerife

What’s Happening with Housing in Tenerife South

Tenerife South is one of the most attractive regions in the Canary Islands for both visitors and property buyers. Its growing popularity, however, is putting heavy pressure on the housing market.

Rising Foreign Demand

Almost 22% of people searching for rentals in the province of Santa Cruz de Tenerife are foreigners. In the southern areas such as Adeje and Arona, international interest is even stronger. Many buyers from Germany, Italy and the United Kingdom invest in properties, with a large share later converted into holiday rentals rather than long-term housing.

Growth of Holiday Rentals

Between January and September 2024, Tenerife South added nearly 1,800 new holiday rental places, marking a 17% increase in less than a year. Municipalities like Adeje, Arona and Granadilla are at the centre of this trend. Across the Canary Islands, more than half of residential homes are now used for tourist rentals, which sharply reduces the number of options available for local residents.

Rent Levels at Record Highs

The average rent in the province of Santa Cruz de Tenerife now exceeds 1,080 euros per month, and each available property attracts more than 100 applicants. Workers in hospitality and tourism often struggle to secure housing close to their jobs, and some are forced to live in caravans or cars due to the lack of affordable options.

Slow Solutions on the Horizon

New construction is not keeping up with demand. Only 7,900 homes were built across the Canary Islands between 2021 and 2023, and public housing projects almost stopped in recent years. Plans for 400 affordable rental homes in Tenerife South are set to begin in 2026, prioritising locals in municipalities such as San Miguel de Abona. While this is a step forward, the housing shortage remains severe today.

Conclusion

Tenerife South continues to attract international attention, but rising tourism and foreign investment are limiting access to housing for locals. With high rents and limited supply, the region faces one of the toughest housing challenges in Spain.