The Brexit effect on Tenerife Property Prices
After some head scratching and doubts immediately after the Brexit referendum, it now seems glaringly obvious that the Brexit effect on Tenerife property prices in the coming months is not going to have any major impact as the international demand for property on the island continues to rise.
In the wake of the Brexit referendum, demand from foreign property buyers rose by 9.4% in the third quarter of 2016. During that same period, demand from British buyers in Spain, according to national statistics, declined by 16%, but the same has not been the case in Tenerife.
A recent report carried out by Spanish Property Insight delved deeper into the decline in British demand and found that Brexit may not have been the main factor. The referendum triggered a sharp decline in the value of the Pound against the Euro, which in almost all cases was the main reason given for a drop. Recent empirical evidence bears this out, as the Pound has started to regain value, British purchases are on the rise again.
The local property market in Tenerife reflects this trend well as Brits refocus on Tenerife as a rewarding investment opportunity. Bruce Grindley, Director at Tenerife Property Shop commented, "British buyers have not decreased since Brexit and if anything, interest has been sustained or increased."
Experiential evidence suggests that future uncertainty in the British economy has even inspired a new type of buyer, one looking for a secure Euro investment to weather the projected potential storms for the Pound in the post Brexit future.
In essence, very little will change for the British property owner in Tenerife regardless of whether they are a citizen of an EU member state or not. The rule of law and its respect for private property rights is not in question. This fact is not ignored by the growing number of investors from beyond Europe, that have already joined the ranks of Tenerife property owners.
Low mortgage rates and eager Banks will continue to encourage investors from Britain and all over the world, and as property values rise on the island, more will flock to join them. The investment opportunity that Tenerife offers remains excellent… and of course the sun will continue to shine! Capital growth and rental income will draw the investors, but beauty of the island, the perfect climate will continue to be a magnet for the huge numbers of freezing Europeans looking for a better lifestyle.
The Brexit effect on Tenerife property prices may have some slight effect on the growth in property values in Tenerife, as some Brits may prosper less. However demand will be rising and prices of homes on this beautiful island with it, as the Italians, French, Belgians, Germans, Scandinavians, Irish, Russians and many others take advantage of the rich pickings the market has to offer.
