Why buy property in Tenerife?
About Tenerife
Tenerife, the largest of the Canary Islands evolved several million years ago as a volcanic land mass not far from the African Coast. It is the third largest volcanic land on the planet and it boasts the highest mountain in the Spanish domain.
The island, often referred to as the island of eternal spring is a tropical paradise with one of the best temperate climates in the world. It was actually NASA that confirmed this using space observation technique. Temperatures in the low twenties are the norm at that time and even during the summer months the temperatures rarely exceed the high twenties.
The island has beautiful forests packed with exotic wildlife and unique plant life and the scenery is stunning. There are giant cliffs, rugged gorges, and huge mountains including Mount Teide, (3718 metres) which towers high above the most amazing volcanic landscape. Mount Teide was justifiably declared a World Heritage Site by UNESCO during 2007. Sadly many tourists miss out on seeing the most breathtaking scenery because they do not venture far from the coastal resorts.
Tenerife welcomes over five million tourists every year from all over the world, about a third of which come from the UK, the remainder mostly from other parts of northern Europe and Scandinavia. Not surprisingly it is also a very popular tourist destination for the Spanish. The most popular months for visitors are January to March when the weather on the Island is probably the best in the world.
For the many tourists the range of activities is extremely diverse and caters for all ages. There are a number of theme parks and no shortage of things to do, for example, golf, diving, fishing, sailing, submarine safaris, swimming or simply lazing on the wonderful beaches. The new exotic Siam Park will be opening shortly where visitors will be able to undertake a thrilling range of water based activities in an oriental setting.
Despite being around for millions of years Tenerife has only evolved as a tourist destination during the past 40 years. The older ones among you may remember when along with the Spanish Costas it was a major jet set destination. In those days the focus was on budget holidays, mass tourism and like many other holiday places, the image of Tenerife inevitably suffered from the consequences of rapid tourist growth.
Much has been written about Tenerife in the past and there is a wealth of content, although some of it may be a little dated.
Tenerife is changing
In recent years, the Canary Islands Government have concentrated on elevating the image of Tenerife as a tourist destination. Tourist building development has been restricted to new 5* hotels since 2001 and rural tourism has also been encouraged in recent years.
Apart from major infrastructure improvements, the island has been made over with luscious tropical planting in the main resorts, and many new 5 star resort hotels have sprung up focussing on attracting tourism from the higher spending sectors.
Las Americas is not all what it used to be, the plan to attract affluent tourists appears to have be successful with an upsurge of classy shopping complexes with a plethora of designer retail outlets and upmarket restaurants flourishing everywhere. The emphasis seems to have been on excluding the traditional cheap bars and restaurants, the new breed of tourists are after all more discerning.
The new exclusive 5* Gran Hotel Bahia del Duque Resort in Fanabe and the Deluxe 5* Abama Golf Resort, also near Adeje, are attracting well heeled tourists to Island who might otherwise have flown to other exotic destinations. These resorts are of the finest available anywhere in the world.
Tenerife may have managed to attract tourism from the elite spending sector but the clever part is, the enhanced image has increased tourism in all sectors. The new beach in Playa San Juan has just been completed and the older resorts like Los Cristianos have also been given a makeover, so that they are even more popular with the traditional beach holiday maker. The range of activity holidays available now is an added bonus the Island.
The number of low cost flights to the Island has increased dramatically and with just over 4 hours flying time from Northern Europe it has now become one of the most popular tourist destinations for Europeans and Scandinavians.
Tenerife has the advantage of being an all year round holiday island and it offers perhaps the shortest flight to any winter destination offering almost guaranteed sun.
Who invests in Tenerife Property Market?
Current reports suggest there are close on a million inhabitants on the Island and that this has risen dramatically by more than 17% during the past five years. Property ownership has always been popular with the many residents.
There as many as 20,000 UK residents and around 40,000 properties owned by Brits. These figures are not exact and the latter is a conservative estimate based on a number of varied sources. There are also many property owners from other countries such as Holland, Belgium Germany, Italy, Norway and now Russia.
Many people who own property on the Island visit frequently especially the retired who mostly come to Tenerife to escape harsh winters in northern Europe; they are locally referred to as the swallows.
There is a huge rental market in Tenerife, many property owners let out their properties to the tourist market when they are not using them and Tenerife has always been a popular choice for buy to let investors because of the holiday market. There is also a good opportunity for long term letting, perhaps with the advantage of sustaining a little less wear and tear on the property.
Why invest in the Tenerife Property Market now?
Tenerife has been successfully re-invented as an affluent tourist destination and inevitably this has lead to an upsurge of high quality developments being constructed, especially around the lush new golf courses.
There are many off plan developments in Tenerife both in and around the major resorts but now also in less urbanised areas. Many of the older style properties are being refurbished which is a natural progression because there is so much emphasis on quality in the property market.
The resident population is increasing and there is little doubt that Tenerife will become even more popular with retirees, not only from the UK, but also from so many other countries. The numbers of tourists visiting the Island is also set to increase so undoubtedly Tenerife is safe bet for property investors.
Property buyers in Tenerife are not always British or Spanish. The current market has buyers from Ireland, Scandinavia, Germany, Holland, Belgium and now Russia since there are now direct flights.
A recent well known house price index publisher is showing an average annual price increase of 3.2% for the whole of Tenerife. The figures for 2007 show that prices of one and two bed units have increased whereas the price of larger units has actually fallen during the past twelve months, which overall is the reason for low growth.
In southern resorts, notably Los Cristianos, the reality is that prices have fallen to suit the market conditions and anyone who is keen to sell will probably accept a low offer, which is a new trend. The reason why this is happening is because of the less favourable exchange rates for the British investors.
Another reason for the poor property market at the moment is the over-supply of property, particularly in the main resorts in the south, which is leading to falling prices, and this is more obvious at the lower end of the market.
It is fair to say to say that the property market is suffering in Tenerife at the moment, especially with the lack of buyers from the UK, mostly due to the strong Euro exchange rate against the pound. Exchange rates are definitely affecting the property market in Tenerife, especially in the South which is most popular with British buyers.
On the flip side though, most sellers are British anyway and when they convert their Euros back to Pounds they are getting about 17% more than they would have done six months ago anyway, so in real terms they can afford to accept a lower offer. Some sellers are even accepting payment in Sterling to avoid the exchange rate problem, this way most of your money does not have to leave the UK.
In conclusion of all of these factors, we would say that there has never been a better time to invest in a property in the South of Tenerife. There are many bargains around and the sellers if they are British will more often than not try and compensate prospective buyers to assist with the exchange rate problem.
If you need help with raising funds, a variety of options are available. Many people can raise funds against equity which may have accrued on their UK property but we can offer assistance with Spanish Mortgages from a variety of different sources including Abbey (Santander Group) and Halifax Hispania.
As you will see we are offering generous incentives to buyers and we genuinely promise we will help you to pay less. We will also help you with a generous after sales service because we recognise that clients need support with rentals, furnishings, remedial works etc.
We have a larger range of properties available and we can steer you in the right direction. Why not visit our website: www.expediaproperty.eu
Property Consultant living and working in Tenerife
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