The Canary Islands have always seen newcomers drawn by the promise of a relaxed lifestyle and year-round sunshine. In 2023, official estimates put the population at around 2.24 million. The percentage of foreign-born residents stands at about 22, and Tenerife alone has seen a steady rise in international arrivals, with more than one-fifth of its population hailing from abroad.
Current indications suggest that 2025 might continue this trend of growth. Immigration watchers say that factors like a strong tourist sector and enticing residency options keep fuelling the Canaries' reputation as a multicultural melting pot.
Although Tenerife and Gran Canaria remain the most populous islands, there are signs that smaller islands could also see higher numbers of arrivals, especially those who prefer a quieter environment.
Property Prices on the Rise
Real estate remains a hot topic among expats and locals. In 2024, property prices across the Canary Islands climbed over 7%, with an average of around 1,678 euros per square metre. Santa Cruz de Tenerife led the charge with prices jumping by nearly 11%, reaching 1,770 euros per square metre.
Observers note that prices across the archipelago have doubled over the past decade, a trend that reflects strong demand and a limited supply of quality housing.
This surge is not limited to the buyer’s market. Rental rates have also gone up, edging past 16 euros per square metre each month toward the end of 2024. The combination of a steadily rising tourist market and robust interest from expatriates has put added pressure on local renters who are still coming to grips with property values that have shot up at a rapid pace.
Possible Tax Shifts and Residency Alternatives
One of the biggest talking points this year is the Spanish government’s proposal to introduce a significant property tax for non-EU citizens. Some say it could be as high as 100% of a home's value, although we and others are waiting for official word before making any moves. In response, non-EU buyers are exploring other residency paths, such as the Digital Nomad Visa.
Some market analysts believe that these proposed changes could slow the current boom. Others predict that investors from countries where the euro remains comparatively strong will still find the Canary Islands an attractive option. Many other countries are levying high taxes now as the world becomes more isolationist.
Euro Exchange Considerations
Currency fluctuations often shape decisions for foreign buyers. A shift in the value of the euro can make a sizeable difference in the final price of property. A weak Euro will lure more buyers, especially as transfer costs to Spain dwindle.
Looking Ahead
Whether it is population growth, property prices, or tax proposals, the Canary Islands have no shortage of talking points. With more foreign buyers and expats contemplating a move here, questions about affordability and sustainability remain at the forefront. Yet the universal consensus seems to be that the Canaries will continue to draw in those who dream of island living, tempered only by ongoing debates over how best to balance economic opportunity with the needs of the local community.
It is an exciting year for anyone with an eye on real estate or a plan to relocate. Immigration trends are likely to keep shaping the housing landscape, and government policies will play a pivotal role in determining how accessible and appealing the islands remain. Whatever direction 2025 ultimately takes, there is little doubt that the Canary Islands will continue to evolve, fuelled by the blend of new arrivals, fresh investments, and a longstanding reputation as a gateway to year-round sunshine and opportunity.
