BUYING INVESTMENT PROPERTY IN THE CANARY ISLANDS

Tourism in the Canary Islands

Tourism is the mainstay of the economy in the Canaries and the infrastructure is solid and well developed. Hotels, restaurants and other facilities are usually high quality and good value for money.

The Property Market

Property appreciation in the Canaries has been around 10 and 12 per cent per year for the last few years. However, some experts predict that certain resorts may see rises of closer to 14 per cent this year. The island of Fuerteventura is creating the the most interest. The windy island is experiencing a major upsurge in interest, although it’s still possible to buy a townhouse for under 60,000€.

With recent years seeing price hikes of 20 per cent (12 per cent in 2005), Fuerteventura represents an excellent investment – villas on a golfing development that cost 290,000€ a year ago are now selling for 420,000€. This ever-popular string of islands is showing no signs of a market slump, and huge rises are predicted for areas such as La Gomera and Fuerteventura.

Golf on the Canaries

The Canaries presently have 15 golf courses, seven in Tenerife, six in Gran Canaria, one in Lanzarote and another in Fuerteventura. Every year visitors come to the Canaries mainly from mainland Spain, the United kingdom and Germany in order to practise golf.

Today the golfer who wants to play golf on his holidays will have the advantage, in comparison with other holiday destinations, of having the possibility to play throughout the year as a result of the Archipelago’s climate. In turn, the diversity of the islands’ countryside allows golf to be played next to the sea, close to wonderful beaches with a refreshing breeze or in any of the courses located in the islands’ interior surrounded by mountains and valleys of leafy vegetation.

Lettings

The Canary Islands see roughly 10 million visitors annually, and the year-round sunny weather ensures a booming rentals market. The demand is for holiday lets and short-term rentals, of which there’s a limited supply. As property has risen in price, so has the cost of lettings, and some areas are experiencing excellent appreciation – for example, Playa Blanca in Lanzarote yields a 20 per cent return.

In Atlantic Gardens in Fuerteventura, properties selling at up to E140,000 can yield a rental return of E560 a month. La Gomera experiences high year-round demand and averages E500 a week for a two-bedroom apartment.

Lanzarote has a thriving rental market, with strong demand for beachfront accommodation. Short-term lets are extremely profitable, with a two-bedroom apartment generating E700 a week. In Tenerife, returns are around E670 a week.

Living in the Canaries

Tenerife has a large expat community in the south-west, and has traditionally attracted retirees looking for year-round sunshine, as well as those who spend the British winter in the tropics.

Lanzarote is spectacular, with wonderful restaurants, nice beaches, friendly people and immaculate properties. It’s clean and the locals are welcoming. However, it’s a small island, and so it can be difficult to buy certain items.

Fuerteventura has a limited expat community, but the locals are friendly, helpful and great to do business with. Just be aware of the Manaña effect, as they’re very slow at getting things done!

It’s difficult to generalise, given the diverse nature of the islands and their population, but it’s important to be aware that these are places driven by tourism, and during peak season, certain resorts can be busy.

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» Why the Canary Islands

» About the islands

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