Rafael Tarajano, president of the Canary Association of Real Estate Managers (Acegi), has assessed the real estate market situation in the islands, noting that while measures have been implemented, the housing emergency and the lack of affordable homes for thousands of Canary families persist.
Tarajano explains that affordable used housing is scarce, driving up prices. New construction, although increasing, is considerably more expensive due to high process costs, including land purchase, taxes, licenses, materials, and salaries, with a 40% increase in the last two years.
“"It's a drama. A healthy market should have at least 4% of housing for rent; in the Canary Islands, it doesn't even reach 0.5%"
Despite an increase in building permits, estimated to reach 7,000 homes this year compared to less than 2,000 previously, Tarajano believes a long way remains to alleviate demand. He points out that the availability of developable land does not necessarily translate into real supply, as land prices often prevent developers from acquiring it.
The Acegi representative criticizes the high tax burden on housing, which amounts to around 30% of the final price, including Property Transfer Tax (ITP), IGIC on new construction, and municipal fees. He stresses that regulations, including transposed European directives and environmental requirements, along with the factor of insularity, make construction in the Canary Islands up to 40% more expensive than on the mainland.
Tarajano laments the shortage of rental housing, describing the market as a "drama" with an offer not reaching 0.5%, far from the healthy 4%. He suggests that the Canary Islands Government's empty housing plan may not be effective and advocates for more generalized rental guarantee campaigns.
Regarding sales prices, although some listings show downward corrections, Tarajano states that prices are not generally decreasing due to strong demand and limited supply. He predicts the situation could start improving in two to three years if construction trends continue.
He positively assesses some decisions by the Government of the Canary Islands but emphasizes the need for greater funding for both the Young Mortgage program and the Housing Plan. He reiterates that a temporary tax reduction would facilitate purchases and help families access housing.
