More demand for Property

New buyers are moving back into the housing market as the number of properties coming up for sale has stopped growing, Tenerife Property Shop reported this week.

The increased demand without a corresponding rise in supply has improved confidence, and the demand is coming from the British market.

Mary Spencer, a Director of Tenerife Property Shop commented, “There is always a seasonal rise at this time, as we move towards the Autumn, but the recent increase has put us on par with the five year rolling average, and exceeds last year.”

Reasons for the rise in demand from the UK can be attributed in no small way to the domestic UK housing market where the Bank of England cut interest rates by a quarter of a percentage point to 4.5 per cent in August.  In the UK this has led to a rise in the level of new buyer interest, which suggests that many households have been waiting to be sure that the UK housing market is not going to crash before putting in an offer on property.

This renewed confidence has a knock on effect on the local Tenerife housing market, where British property ownership has been estimated at as high as 48,000 homes.

The Tenerife Property Shop Sale Price Index, the only index of advertised property prices in Tenerife shows that local prices are still mainly at an even keel, showing little or no growth over the summer.

Mary Spencer went on to say, “We don’t expect asking prices to rise for a few months yet as stock levels remain high.  We anticipate that a supply equilibrium will be reached in the early part of next year, when we expect to see price growth again.  At the moment, it is the best value properties that are being snapped up.  Properties that have been on the market for some time, at the same price, are likely to remain for sale until growth catches up with them.”

The report also shows that the concentration of demand is at the low to medium sector of the market, with properties in excess of 500,000 being slower to show an increase in interest.