Property prices heat up on the Canary Islands

2007 was a difficult year for the Spanish property market and for the seven Canary Islands located off the north western coast of mainland Africa it was no exception.

Figures from the Ministry of Industry, Trade and Tourism reported that the Canary Islands were the only region in Spain to report a fall in tourist numbers, receiving only 7 million between Jan – Oct 2007, nearly a quarter of a million fewer than expected.

Average property prices were also affected with data from award winning Spanish property portal, Kyero.com, revealing that moderate price drops were seen on most Canary Islands apart from Tenerife which saw a respectable 7.5% increase in 2007 rising from €203,000 to €219,500.

As we move into 2008, winter sun tourism is expected to have a positive impact on this small archipelago both in terms of tourism levels and property prices. ABTA predicted in December 2007 that up to 3.5 million Britons would be spending some vacation time abroad this winter with a significant proportion choosing the Canary Islands with their warm climate and short flying time.

Looking at the latest independent data from the Kyero.com Spanish House Price Index (Jan 08) it can be seen that Lanzarote, the fourth largest island, remains the most expensive with prices averaging €312,000, 27% above the national average of €245,000.

Fuerteventura, the second largest of the islands, recorded an average price drop of 9.2% in 2007 from €247,500 to €226,750 however prices appear to have picked up with an average price of €250,000, 2% above the national average, recorded for January 2008.

For bargain hunters, Tenerife, the largest island and home to the co-capital Santa Cruz de Tenerife, has always offered property well below the national average. 2007 did indeed see a marked price increase however property still remains affordable averaging at €208,000, 15% below the national average in Jan 08.

Data for Gran Canaria, home of the other co-capital, Las Palmas, displayed a fall in average property prices of 4.8% in 2007 from €233,000 to €222,400. The latest figures from the Kyero.com Spanish House Price Index show a further decline to €198,000, 19% below the national average despite the Councillor for Tourism on Gran Canaria stating that his data showed a 1.2% growth in tourist numbers in October 2007.