Tenerife Property Outlook
TENERIFE PROPERTY OUTLOOK
by Simon Sutton George, The Tenerife Property Group, Mobile: 610 182 744
Quarter 1, 2016 – what happened?
Summer 2016 is just around the corner, well in fact, by the time you read this it’ll have already started, at least here in Tenerife...if you’re in the UK it will have already been and gone...!!! – Sorry I can never resist a little dig at the UK weather; in fact I know it’s been quite acceptable of late.
It’s time to find out how the property market fared during Q1 of 2016, so let’s have a look at what happened to the Spanish and Tenerife property markets. As I tend to point out, it’s always difficult to obtain true sales figures because there are still buyers and sellers that are not declaring the full value of the property that’s being sold. This always has an impact on the true results because not all figures are written on the property registration documents and as such, anything declared still has to be taken with a pinch...or a little more, of salt.
The other point that we need to consider is that Spain is a massive country. In fact, Spain is so large that some of the results from the various municipalities throughout the country are so different regarding increases, decreases or amount of properties sold they could almost be from different countries, so we need to consider this when looking at massive drops and increases due to the fact that some areas are not as favourable as others to buy in.
As we now know, the average prices of housing in Spain was at its peak in 2007, and since then, the crisis and lack of money lending have in turn brought down sales and this affected the average property prices throughout the country by slightly over 45%. During the last year I reported that TINSA produced an index showing that some of the worst hit areas (all in mainland Spain) were La Rioja at -56%, Navarra at -51% and Murcia at -50%. These figures have improved since but they’ve clearly got a long way to go to get back to anything like the figures from 2007 and before. A recent TINSA index report indicated that, from the peak, average house prices in Spain are still down by 41%. So, although this represents a massive drop from the good old days, it’s actually a small increase from the previously quoted 45% from last year.
Property market results for the first quarter of 2016, compared with the last quarter of 2015, have proved to be good for 6 of the regions of Spain. The top 3 being Madrid, in first place once again, with an increase of 1.2%; then the Balearic Islands with an increase of 0.7%; and in third place, the Canary Islands with an increase of 0.6%.
As always where there are winners, there have to be losers, and 10 regions registered quarter on quarter losses - the 3 worst hit were Extremadura -4.4%, Cantabria -1.7% and Valencia at -1.3%. Overall, prices rose nationally for Quarter 1 2016 by 3.1%.
Looking at the figures as a whole, the Spanish property market has been hit for six thanks to massive over-building during the peak years and although there are still no great green shoots of recovery for the country - also not being helped by the lack of a government in power since Christmas 2015 – any increase, no matter how small should be viewed as a positive note.
A recent report showed that in 2015 British buyers still topped the table of foreign buyers, where clearly the fantastic Sterling-Euro rate helped the property market. This year so far there have been some great highs and some lows too regarding currency fluctuations but as I speak, it seems to be back on the up...but we’re still awaiting the EU referendum from the UK, so we’ll have to see how that pans out.
It does seem that after a few years of doom and gloom there are a few glimmers of hope that the crisis and poor lending are close to being over. This suggests that it still seems a great time to buy as prices look good value and we’re certainly noticing that they’re on the increase in certain complexes and areas of Tenerife.
Let’s see how the next quarter pans out and on through the rest of the year. I’ll continue to report it here and you’ll be able to read it in The Tenerife Property Guide, that’s assuming that if you’re a Brit and the UK hasn’t pulled out of the EU - and if they have, that you managed to obtain the required visa to gain access to Tenerife and come on holiday again...only joking, as I mentioned last month, I don’t think that the UK will pull out, let’s see what happens later in the month, I may well be proved wrong!