Its a query we get from lots of potential buyers “What is happening with Tenerife property prices?” The problem with answering this question is that it really depends on where in Tenerife you are talking about. The North is very different from the South, residential (family) homes are very different from holiday homes etc.
We are primarily concerned with the South and West coast of Tenerife and the market is divided between residential or family homes and holiday homes so I will look at both of these segments. My own personal view is that the bottom of the current downturn may have been reached but on the other hand I see no reason whatsoever for prices to rise and there are more bargains to be had. Now may be the best time to buy a property in Tenerife – then again – you might end up kicking yourself 12 months from now if you do take the plunge. The problem with estimating such things is that no-one really knows and those that profess to often have their own agenda for doing so.
Unfortunately there’s not a lot of reliable data available which differentiates these markets but one thing we can look at is buyer interest or more specifically how many people are searching for Tenerife Property on the internet. The data concerning how many people have searched Google for the phrase “Tenerife property” over the the past 4 years looks like this:
The overall decline is immediately obvious with search volumes falling massively. What you should also consider is that over the last 4 years MORE people have taken to using the internet than ever before so the results would be even more pronounced if they were factored in. There is a peak around January/February each year which is clearly visible in January/February this year.
Now these results certainly aren´t anything to do with the price people are paying but what they show is interest in Tenerife property and that interest is what has left the market. Lower interest = lower demand. Lower demand = lower prices. The overall decline seems to have slowed over the past 12 months so is that a sign of an improvement? Lets look in more detail:
Tenerife Property search September 09 to September 10
The usual “Spring peak” is there (that big blob in the middle) but by April that drops of sharply and interest has remained subdued for the rest of the year.
What to make of such data? Well I think this shows that there is no recovery underway. I see no signs whatsoever of a pick up in the market and no signs of any major spike in interest in the market. What I do see day to day is that prices are continuing to fall. Think about it, if interest remains very low, more and more people who have been waiting for a recover begin to give up on the idea and become more willing to take a lower offer on their property. As the search volume remains low (and if this truly reflects interest in buying a property in Tenerife) then more and more property owners will come to the realisation that if they really want to sell, they are going to have to drop the prices – by a large amount.
Okay there’s not oodles of data there but there is no denying what these graphs show – interest in property in Tenerife shows no signs of rising – regardless of what a salesman may tell you. A sustained lull in buyer activity (that means buyer interest does not have to keep dropping – just remain low) will force more and more owners to drop their prices. This ties in with my own personal feelings that prices will fall further. More and more repossession properties entering the Tenerife market will also impact prices as buyers see a credible alternative to overpriced holiday homes listed by stubborn unmotivated sellers. Repossessions aren´t always fantastic and we only list about 30% to 40% of the stock we are sent by Spanish banks. We have to check every single repossession we list to ensure it amongst the lowest priced properties available – if not the lowest (which it is with 90% of our listings.) We are also very strict about listing private sales – if they are not realistically priced for todays market – we are not interested. It costs us time and money to advertise property and if we don´t think a property is priced to sell then whats the point?
What to do if you are a seller
If you are a seller and you need to sell, then price your property at a level which will at least get you viewings. It is easy to judge – list your property, wait a month and if you have had no viewings you need to drop the price. if you want a free appraisal – contact us and ask. We will tell you what you need to list it for in order to generate interest.
If you don´t need to sell then don´t!!! If you are not a motivated seller then it is very unlikely you are going to achieve a price you will be happy with HOWEVER think about this very carefully because if you suddenly change your mind and decide you do need to offload further down the line, things may be a lot worse for you in 12 months time.
What to do if you are a buyer
If you are a buyer, then things are looking good, keep an eye on prices and watch for asking prices falling on the complexes you are interested in. Sign up to our repossession list and see what is coming from the banks each week and if you need a mortgage – contact a broker and pre-qualify so you are in a position to react quickly when you do find a bargain. We also list bargains/distressed developments and urgent sales so signing up for free means you won´t miss anything.
You can also tell us exactly what you are looking for (we have a separate database of close to 700 properties) and we can categorise your requirements so you only receive those properties you are interested in. This is a great “hands-free” way of monitoring price trends without any annoying sales calls. If you see something you like, you make an enquiry – very easy. Send us the details of what you are looking for and we can have this system set up within 24 hours, you then sit back and wait for the right property at the right price.
I´ll update this Tenerife property prices post at a later date and will take another look at the data to see how things have changed.
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