The Canary Islands have become an ideal destination for people looking for a second home and investment. In fact, the sale and purchase of homes by foreigners accounted for 52% of all transactions in 2022. That is, half of the houses sold last year in the Canaries were bought a person from outside Spain, according to data from the General Council of Notaries and the National Statistics Institute (INE) collected in a report published on the Spanish TV channel Antena 3. In general, home purchases in Spain broke records in 2022, while the profile of the buyers of properties in the Canary Islands has changed: they are no longer retired people, now they are young families who see the option of investing in an autonomous community with a pleasant climate all year round.
Property sales carried out in the Canary Islands by foreigners resident in Spain stood at 1,132 between July and September alone, 43.2% more than the 790 recorded by the Ministry in the third quarter of 2021. Meanwhile, foreigners not resident in the country carried out 1,676 sales and purchases, compared to 1,098 in the third quarter of 2021, which represents an increase of 52.6%.
Many of these operations may involve granting what is known as a "golden visa" to the buyer, as long as the transaction exceeds half a million euros. This practice has been vetoed by countries such as Canada, while Spain continues with its version of the programme. Greece and Portugal have opted to apply changes in the segment of portfolios with large investment capacity, increasing the requirements for their application in Greece and putting on the table the possibility of eliminating them in the neighbouring country.
In Spain, however, this change is not yet present in the national political and economic debate. Iñaki Unsain, a real estate personal shopper in Barcelona, points out that the situation in Spain has nothing to do with the situation in Canada, where prices have risen by just 4%, after three consecutive years of falling prices. Rising interest rates and inflation will shift much of the demand from buying to renting, which will put even more pressure on rental prices.
The effects of inflation and rising interest rates will mean that many buyers will not be able to buy and therefore it is possible that in 2023 we will see a drop in the volume of transactions and perhaps a slight downward correction in house prices. "In Spain, the percentage of foreigners buying in our country is historically 15% and has not increased since the Golden Visa was introduced, therefore, we do not believe that the conditions for obtaining it should be revised upwards," the firm points out.
"The competitiveness of property prices in comparison to other European countries, together with the national cultural heritage and the climate, have become key elements in attracting large international portfolios to Spain," they add.
For this same reason, the coastal regions of Spain and the archipelagos have registered the highest demand from these clients. According to figures from the Property Registrars, the areas that accumulated the highest number of sales to foreigners were the Balearic Islands, the Canary Islands, the Valencian Community, the Region of Murcia and Andalusia.