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News: Tenerife zooms ahead of the Costas

Thu, 19 Jul 07

Despite the recent property crisis in Spain, Tenerife’s property sales are still rising...

Reports that the housing bubble in Spain has burst have led to an increase in property sales elsewhere around the mainland. Tenerife, fortunate to have all year round perfect weather, is well placed to cater for the large number of people from the UK wishing to purchase somewhere in the sun.

Tenerife must be viewed as a ‘micro-market’, operating within the larger Spanish economy but independent to factors affecting a crash from the Spanish market.

Costa ‘slowdown’

The property boom in the Costas looks to slow due to an over supply of property, corruption scandals and land grab issues, diminishing the confidence of the buyer

In 2001 the Tenerife government voted a moratorium on new tourist building, limiting the supply of new homes thus preventing over building. Despite the restricted supply, with no artificial media frenzy similar to that incited on the Costas, price rises were more moderate

Currently, property in Tenerife continues to rise in value, while the Costas stagnate and are even expected to drop in the next 12 – 18 months

The foreign buyer market remains strong in Tenerife. Research shows 42,000 homes are owned by the British alone, and property owners are achieving high rental income

Fastest growing in Europe

The incentive of year long sunshine and the increasing number of tourists, 6 million in 2006, has led to a demand for low cost flight operators to obtain new routes

Tenerife’s resident population is one of the fastest growing in Europe. New mortgage lenders and applications are increasing and rental costs are high, encouraging locals to buy as soon as they can and ensuring local demand remains strong

These factors combined with future predictions, would indicate that demand for property will be rising correspondingly, due to the close correlation between the number of visitors to the island and the number of properties sold to foreigners.


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