The real estate market has closed 2021 with clear signs of recovery, after a 5% decrease as a result of the pandemic. According to official figures, until November, 8,200 sales operations were carried out, and forecasts suggest that 2022 will close above 9,000. This is 30% more than a year before, according to data from the General Council of Notaries.
The ease of financing that banks are currently providing, together with low interest rates, are factors that explain the current dynamism of the real estate market in the Canary Islands. To this must be added the savings of households, the improvement in consumer confidence and the need that the pandemic has discovered for larger homes with open spaces.
What’s behind the growing demand?
The demand is formed above all by residents, among whom there are people looking for their first home, and others who, after covid, have decided to change their home. The pandemic has generated new demand and supply, since these are people who sell their homes to buy others. To this demand we must add the foreigners who in 2021 returned to the real estate market of the islands.
Small investors who want to acquire flats as a ‘refuge’ of profitability before other forms of investment are also added. Renting a home on the islands can yield a return of 6% compared to 0.3% given by ten-year government bonds, for example.
The projections for the next months of the year
For the coming months, the real estate sector is confident that the market will maintain its current dynamism. However, problems could arise in relation to the lack of supply of new housing. In 2021, the construction sector boomed, offering the market some 3,500 homes. It is expected to continue at the same pace to respond to demand and prevent prices from being excessively stressed.
One of the peculiarities of the purchases that are currently being made is that many are made with their own resources in their entirety, without closing a mortgage, or partially, resorting to credit in a small percentage.
Prices rise 6% and will continue to rise in 2022
Housing prices have risen in 2021 between 4% and 6%. In the second case, the rebound has been greater due to the rise in the price of raw materials. According to Tinsa data, the average price per square meter on the islands is 1,376 euros. The figure assumes that it is still 28% below maximum prices. From the lows, they are up 20%.
By province, Santa Cruz de Tenerife has experienced a greater increase, of 10.9%, while in Las Palmas the rise is 5.2%. By capital, the city of Las Palmas de Gran Canaria presents a higher price, of 1,526 euros, while in Santa Cruz de Tenerife, the square meter stands at 1,394 euros. Prices are expected to continue to rise slightly throughout this year, although the experts consulted reject the possibility of a new bubble.
From the Official Association of Real Estate Agents, it points out that there is no prospect that the market will overheat or become tense in the coming years and they completely rule out the possibility that Spain will once again plunge into a real estate bubble situation.
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