The property rental market is about to get even worse in the Canary Islands

Almost 6,000 properties will leave the residential rental market in the Canary Islands driving up prices even more due to the impact of the new Housing law, according to a report prepared by the Tecnocasa group and the Pompeu Fabra University (UPF).

At national level, estimates indicate that there will be almost 110,000 owners who will choose to stop renting due to the changes introduced by the new regulations, among which are putting a cap on rents in the so-called ‘stressed areas’ and the legal uncertainty that it generates. This represents almost 12% of the total of residential properties for rent that currently exists.

In the specific case of the Canary Islands, the Tecnocasa report states that three municipalities will be the ones that will suffer the most from the impact of the new law. These are Granadilla de Abona (south Tenerife), Santa Lucía de Tirajana (south Gran Canaria), and Arona (south Tenerife), which are already the municipalities with the lowest supply. In the case of these three areas, the reduction will be approximately 21%.

Tecnocasa statistics predict that Granadilla de Abona will lose 394 out of a total of 1,876 rented properties: Santa Lucía de Tirajana will lose 541 out of 2,575 while Arona will lose 1,540 out of 7,511.

Following these are:
· La Laguna: 18% drop of 1,185 properties from the 6,492 currently in the market.

· Santa Cruz: 16% drop of 1,230 from 7,690 properties.

· La Orotova: 15.5% drop of 94 from 606 properties.

· Puerto de la Cruz: 15.5% drop of 385 from 2,484 properties.

· Las Palmas: 10.5% drop of 360 from almost 4,500 properties.

· Adeje: 10.% drop of 138 from 1,385 properties.

They will leave the market when the current contracts end:
According to the report, these properties will leave the rental market when the current contracts end, with 7.7% of the owners selling their properties, while 4% are considering other options, such as leasing for use other than housing, but in any case, they would leave the residential market.

Mortgages:
In relation to the mortgage market, the average amount borrowed in the first half of 2023 stands at 121,782 euros, with a variation of -2.7% compared to that a year ago (125,186 euros - first half of 2022).

Paolo Boarini, CEO of Grupo Tecnocasa, reviewed the main risk indicators of a mortgage and explained that, for example, the ratio between the monthly mortgage amount and the income of the mortgagee is 35% of their salary, which is the maximum recommended to minimize the risk of non-payment of a mortgage, and the highest percentage since 2011.