Canary nationalist political party Nueva Canarias wants the regional government to address the large number of property purchases by non-residents in the archipelago, and to an extent limit the number of properties that can be bought by foreigners in the popular holiday islands.
This comes after Spain’s other archipelago, the Balearic Islands, also started this same debate in November 2022, with the regional Senate agreeing to discuss solutions.
The Canary Islands are in the midst of a housing crisis, with high rents, a shortage of properties, and an increase in holiday homes.
The main islands of Tenerife and Gran Canaria also suffer from overpopulation.
With an area of 7,447 km2, the archipelago is one of the smallest regions in terms of landmass, but its 2.2 million inhabitants rank it seventh in terms of regional populations in Spain, and in practice this means there’s less space on which to build homes.
In fact, the Canaries have one the highest population densities in Spain and Europe with 302 people per km2. Gran Canaria, where the most populous city of Las Palmas lies, is higher still: 548,41 inhabitants per km2.
In the third quarter of 2022, 33.69 percent of homes in the Canary Islands were purchased by foreigners according to data from Spain’s College of Property Registrars.
This is the highest proportion in Spain, ahead of the Balearic Islands at 31.46 percent and well above the average in the whole of Spain at 15.92 percent.
Buying property in the Canary Islands is seen as a good investment asset for many foreigners due to the relatively lower cost, mild year-round weather, beautiful surroundings, and strong tourist industry.
What these stats don’t tell us, however, is if most of these purchases are by foreign residents or non-residents.
Experts believe there are clues that point to the fact that many non-residents are buying homes, such as the high percentages of mini 40m2 apartments being sold and the high concentration of second homes located in municipalities with the most tourists.
So far, it’s not exactly clear what the Nuevas Canarias party wants the exact rules to be, but they have cited examples of the Balearic Islands where they have asked that the rules “prevent second residences from eating up primary residences”.
Many agree that there are several solutions to the problem that don’t actually involve introducing purchasing limits for foreigners.
One potential solution would be to increase taxes. Another solution is to follow a measure similar to what has been done in Barcelona to make it very difficult to buy properties to rent out on Airbnb. In the Catalan capital, it’s illegal to rent out your property to tourists on a short-term basis if you don’t have a tourist licence and the City Council is no longer issuing these.
It remains to be seen what the outcome of the Canary Islands’ study on foreign property owners will be and ultimately what solution they decide upon.
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Viva Costa has been working with Mortgage Brokers for over 20 years helping their clients finance their dream home overseas
Whether you are buying a dream home in the sun for a holiday home or moving permanently you may be looking for a mortgage to help finance it
Before you commit to purchasing a property overseas you should make sure you know what your finance options are as once you commit to buy and pay a deposit if you can’t get a mortgage you may not get the deposit back.
If you are thinking of buying cash and then looking to refinance at a later date across most of Europe that’s not always an option as there are very few refinance products available and often if available they are at reduced loan to values, so looking at a mortgage at the time of purchase may be wise.