Blog Tenerife Real Estate Market: 2024 Predictions and Insights

Tenerife Real Estate Market: 2024 Predictions and Insights

Tenerife Real Estate Market: 2024 Predictions and Insights

As we step into the real estate landscape of Tenerife for 2024, it's imperative to draw parallels from the broader Spanish property market trends outlined in the article "Outlook for the Spanish Property Market in 2024." Tenerife, nestled in the Canary Islands, boasts its unique charm, yet the echoes of overarching trends resonate on this vibrant island.

Spanish Property Prices in Tenerife in 2024

In alignment with the general predictions for Spain, analysts anticipate stability in property prices on the island. Despite a drop in real estate transactions in Spain this year, Tenerife has maintained resilient pricing, showcasing steady increases since January.

In 2023, despite interest rates reaching 4.5%, Tenerife's real estate has not depreciated. Tinsa's latest report reveals a 7.7% annual increase in property prices in the Balearic and Canary Islands, with an overall moderation trend. Looking ahead to 2024, the European Central Bank's reluctance to significantly lower interest rates is expected to keep the mortgage market tight, influencing property prices on the island.

Predictions for 2024:

  • The BBVA forecasts a 3% rise in Tenerife's property prices next year. However, when accounting for inflation, this increase might translate to a 0.6% decrease.

  • The University of Barcelona, cited in Business Insider, anticipates a more pronounced dip of 3% in Tenerife's property prices when adjusted for inflation.

  • Bankinter analysts, quoted in El Mundo, predict a correction of 2% in Tenerife's property prices next year.

  • Fotocasa, on a more optimistic note, believes that prices will remain stable due to a robust job market, high demand from solvent investors and foreign buyers, coupled with a shortage of supply. Notably, average prices still linger 22% below their 2007 peak.

Sales in the Tenerife Property Market in 2024

In 2022, Tenerife experienced a surge in property transactions, reminiscent of the peak year of 2007. However, 2023 witnessed a consistent but constrained market due to stringent lending conditions, aligning with Spain's overall trend. The BBVA suggests that Tenerife's sales in 2023 will mirror those of 2019, and analysts foresee up to a 10% decrease in sales in 2024.

Supply of Property in Tenerife in 2024

Low inventory levels persist as a constant in Tenerife's property market for 2024, mirroring the broader Spanish trend highlighted by the BBVA. The chronic shortage of new homes, especially in highly sought-after locations, is a challenge in Tenerife, particularly in areas influenced by foreign buyers.

2024 in a Nutshell for Tenerife:

  • Expect stable prices with possible upticks in high-demand areas.

  • Sales levels projected to be on par with those in 2019, indicating a continuation of the downward trend.

  • High-interest rates persist, influencing the mortgage market.

  • The gap between supply and demand likely to widen further.

Drawing insights from both the broader Spanish market and the specific nuances of Tenerife, prospective buyers and investors should stay attuned to these predictions to make informed decisions in the dynamic real estate landscape of 2024.

(Sources: BBVA, Tinsa, Business Insider, El Mundo)

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