Buy property in Tenerife now?

We often get the question if now is the right time to buy property in Tenerife? Tenerife is known for its warm weather and year around sun. The Island is visited by millions of tourists every year who try to escape cold winters and rainy summers.

Many families has fallen in love with the Island and taken the full step and moved here, some even started their own business in Tenerife. Others have bought property in Tenerife to spend parts of the year here as a holiday getaway. Some people have purchased their Tenerife property mainly as an investment; running holiday lettings, maybe with the dream of either one day moving into it themselves, or selling it off with a future profit.

Tenerife is easily accessible from most countries in Europe, with direct flights from many airports. With a flight time of 4-6 hours, Tenerife can be reached by more than 800 million people in Europe! This is why Tenerife is such an exciting destination to invest in property.

Although the property market in Spain is going through a very rough period at the moment, the property market in Teneryfe is a bit different. Tenerife has previously been relatively sheltered by the property slumps. Historically prices on the Island have been below mainland, giving some room for maneuver. However the key difference between property in Tenerife and mainland Spain has been “demand and supply”. Tenerife did not experience the huge over building that has struck the Costas and mainland.

Brits have traditionally been the biggest market for oversea property investments in Tenerife. Though there has been a slump after the recession, many Brits are getting ready to move money overseas to purchase a second home. Some do it for tax reasons, others are planning their retirement and pensions. But as the weather back home worsens people wants to have a second home abroad. Many are thinking that with property prices across Europe being held down by recessions and weakening single currency, they may find themselves staying abroad for longer periods.

The Brits have predominately bought property in the south of Tenerife. The tourist areas in the north of Tenrife like Puerto De La Cruz, has seen more property investments from the German and Scandinavian market. The new emerging markets like Russia and Eastern Europe is groving, and will be very important for the Island in the future.

The demographics of people buying property in Tenerife varies, but traditionally it has been “empty nesters”, couples who have paid down their mortgage and therefore has had extra equity. But lately an increasing group of buyers are private investors or investment groups, who see Tenrife property as an attrective investment at the moment!

The domestic market is fairly slow at the moment, mainly due to the financial state of Spain and the Canaries, high unemployment, and the fact that it is quite difficult for residents to get loans in Spanish banks at the moment.

Recently the Economy Minister of Spain, Luis de Guidos expressed that he is hopeful of the property sales in Tenerife and Spain. Spanish banks are hopeful that investors will show strong interest in real estate portofolios they are selling, as long as the price is right.

We feel that even though Spain is experiencing a very difficult time ahead, that now could be the right time to buy property in Tenerife!

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