Property Prices in Tenerife are set to Rise
The link between tourism and the property market in the south of Tenerife is beyond doubt and the trends in tourism are changing. We look at how these changes will affect property prices in Tenerife and investment potential for buyers.
The first and most noticeable trend is the sheer number of tourists reported by the official statistics. The total number of visitors to Tenerife in 2016 reached record levels, and the island airports reported 6,363,447 incoming passengers, a staggering 14.8% rise on the previous year.
For investors and vendors of Tenerife property, this is of course good news as it represents a rise in the size of the property buying market, and demand for homes on the island. Tenerife Property Shop reported the highest level of property completions in a decade last year, bearing out the direct link between tourism and property purchases.
The main reasons behind the growth in tourist numbers seem unlikely to change in the near future. Political instability in many of Europe’s popular tourist destinations have reduced the number of options available to holidaymakers, and Tenerife’s sun will continue to shine. It is unlikely that either will change in the coming years.
Europe’s second home market follows the same pattern as holiday trends, as more tourists discover Tenerife, more will be buying homes here. But the tourist figures give us more insight than simply telling us that demand for Tenerife property has been growing and will continue. We can also discover a little more about that demand and how it affects property prices in Tenerife.
Whereas previously most foreign property buyers in Tenerife were British, much of the rise in demand has been from other countries. Referring back to the tourism statistics we see a rise in visitors such as the Dutch, Belgians, Irish and Italians all of whom have been growing in numbers amongst the ranks of Tenerife homeowners. This increased diversity of demand is indicative of the good health of the market, and an indicator of the growth potential of property prices in Tenerife as investors and sellers find a wider market of buyers.
The Brits still remain the largest market for property in Tenerife and demand has grown unabated. Where some feared a slump in demand from UK buyers as Brexit draws closer, the evidence shows the opposite. Purchases from British buyers continue to rise, but beyond the normal reasons for purchase, investors are now also citing the need to have Euro assets in the Brexit future. Second homes in Tenerife, of course can provide an excellent investment return as well as all the benefits of owning a home on a paradise island.
The lessons for property investors to learn from the tourism statistics in Tenerife are quite clear. The size and diversity of the market is increasing rapidly and unless the supply of property increases in the tourist areas of Tenerife, there can only be one result: price rises. Property prices in Tenerife are set to rise beyond normal expectations for the foreseeable future… the time to invest, or re-invest is NOW!
