News: Tenerife tumbling

Mon, 05 Nov 07

Property prices across Tenerife are falling, which is great news for investors...

Value It España, the Tenerife based assessor and publisher of property prices for Tenerife, releases an assessment of the recent government (ministry of housing) figures for the major municipios in Tenerife. The figures based upon the official property registry figures as recorded by notaries, before inflation of 3.7%, show falling property costs per square metre for most of the areas.

In the north of Tenerife, in Puerto de la Cruz, the fall has been 7% from the second quarter to the third quarter (ending in September) with a cost per square metre of 2030 euros. La Orotava is static between the quarters at 1588 euros per square metre while Los Realejos is down 1.4% at 1533 euros per square metre.

Adeje the exception

In the South of Tenerife, Adeje has shown an increase of 7% between the two quarters, with a third quarter cost of 2423 euros per square metre, with Arona showing a fall of 1,3% at 2052 euros per square metre, and Granadilla a rise of 1,5% to 1755 euros per square metre. La Laguna registered 0.5% increase at 1639 euros per square metre.

Commenting on these figures J Gardner of Value it said: “these figures show falling prices, with the exception of Adeje. In Adeje´s case, if you remove general inflation property costs moved up 3.3%. For the rest there have been real falls in costs of property for these areas.

The Value It survey of property costs show figures for these same areas as being much higher, higher by up to 26%, based upon the published selling prices. For Puerto de la Cruz the published selling prices, or asking prices are 26% greater, and 20% greater in La Orotava, and 15% greater in Arona.

Negotiation is the key

Commenting on this J Gardner said: “The Value It surveys are based upon over 5000 properties for sale, while the government figures are for around 2500 properties from data from completed transactions.

“However we can plausibly explain the differences between the two sets of figures as being due to negotiations for lower prices maybe reducing the asking prices by 10-15% and maybe the under declaration to the notary as to the real selling price.

“However the gap is great and our advice to buyers is to negotiate to the lower quarter cost per square metre in order to leave some headroom for further falls in prices. This is something we advise in our guides and we provide these target prices for would be buyers”

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