Gran Canaria Price Trend?
January 21st, 2008
Question: We are condisering investing in a two bedroom rental property in Gran Canaria shortly. According to your index the prices have remained fairly steady over the past few years but do you see any particular trend and could this be affected by a possible relaxation of the building morartorium in the future?
Answer: I agree with you that the market in the Canary Islands has been pretty flat recently:
One of the problems with this trend is that there’s so little reliable data available. Our own trends for the Canaries are the result of just a few hundred properties for sale there (compared to approx 20,000 in Malaga). So you should be aware that a few unrealistically priced properties would skew these trends dramatically.
Having said that – there isn’t a more reliable source of data (in my opinion) for these reasons.
In terms of future trends, that’s even harder to predict. My gut feel is that prices will be pretty much flat across Spain for the next couple of years. Aside from distressed sales, I don’t see prices falling much. Spanish sellers would rather wait then reduce their prices and they form the bulk of the market.
If buying now, I wouldn’t count on any capital gains in the short to mid term (although I think actual losses are unlikely). In terms of the potential rental income of a property, again I would be wary of banking on that to meet mortgage repayments. There are a lot of holiday home rentals in Spain – more than there are tourists to fill them.
The long let market will grow, I believe, but outside of the largest cities, that’s not a well established market. There’s demand, but insufficient supply at the moment. I believe that the long let market will grow over the next couple of years but, again, it’s a little too soon to tell how that’s going to pan out.
Martin Dell, Kyero.com
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