Are Tenerife Property Prices, in 2023, going up or down?

Are property prices in Tenerife going up or down right now, in 2023? How has the market been affected by Coronavirus? How has Brexit affected prices in Tenerife? (Updated January 2023.)

The short answer is – property prices in Tenerife have been rising and have showed no signs of slowing down so far in 2023.

The long answer is below where I share my thoughts on what is happening with the property market and prices here, taking into account Coronavirus and the pandemic, travel restrictions and Brexit and the 90 day rule for British buyers, the conflict in Ukraine etc, recessions in various economies etc:

Throughout 2022 and into 2023 the property market in Tenerife continued to boom and the biggest problem for buyers ended up being a lack of supply which, as I write this. There are few properties for sale and a large amount of potential buyers looking. For my agency, 2021 was a record year. Yet by May 2022, I had already surpassed what we achieved in 2021 and finished 2022 with almost 20 Million Euros in Sales, by far our highest volume ever. Suffice to say, it has been extremely busy across the South of the island and at every level, from studio apartments to villas.

The average sales price for my agency in 2022 was 454,000€ – a huge increase over 2021 (which was around 260,000€) which was mainly down to a huge surge in demand for houses and villas at the higher end of the market. One of our sales was quite possible the highest priced residential sale in the South of Tenerife – a large, modern villa in Costa Adeje Golf priced at over 6,000,000€ which we closed in September 2022.

Who has been buying?

I work in all markets across Europe. I sell to lots of Brits and lots of non-Brits. From the huge number of sales we have had in 2021 and 2022, the nationalities (of which there were 16) were very mixed. 43% of our sales were to British, 12% to Spanish, 7% to each of Belgian, German and Irish and 24% were across the rest, which were Czech, Italian, Ukrainian, Dutch, Russian, Lithuanian, Swedish, Polish, Hungarian, Slovenian and Romanian. The number of buyers from these countries is rising and this is a market we are paying a lot of attention to.

So the British market is still our largest but has fallen as an overall percentage of our sales:

26% of our sales in 2021 and 2022 were at full asking price. That isn´t normal but they were all well priced, good properties in popular areas.

What kind of offers are people making and accepting for property in Tenerife?

In 2021, the average asking price was 268,000€ and the average accepted offer was 262,000€. This is an average accepted offer of 97% of asking price over all of our sales.

In 2022 the average asking price has been more or less 468,500€ and the average accepted offer was 454,000€. This gives an identical figure of 97% of asking price being accepted on average.

It is more important than ever to be targeting buyers from the rest of Europe, as well as the UK. Countries like Czech Republic, Hungary, Romania and Poland are very active, as are the Baltic states. I massively increased our marketing budget in 2020 as the Covid restrictions kicked in and that paid off for me and for my clients who wanted to sell. Especially when many agencies pulled back and reduced their marketing spend (some to zero.)

Brexit effect, how has Brexit affected property prices in Tenerife?:

The 90/180 rule does not appear to be affecting demand – owners can still spend up to 6 months a year here. Looking at buyers from the UK, most of them tend to be of working age and generally looking to spend 2 or 3 weeks at a time here so aren´t really affected.

This is the same for all of the other buyers we have from outside the EU, from Russia and the US for example. Plenty of Brits have bought in Florida and manage perfectly well there without unlimited access.

One effect Brexit may be having is that Brits now have to choose when to take their holidays here as many were used to arriving in October / November and staying right the way through until Easter. This is no longer possible and many will now forgo October, November and December and opt to arrive in January for 3 months.  In 2022, it did seem to quieten in october and November when it would normally be increasing. And then things really took off for me just before Christams and have been busy since then. This is likely because this Winter crowd do account for a large volume of sales around the 185,000€ to 250,000€ price range for 1 bed apartments and make up a large proportion of our sellers, which I will cover in more detail in the next section.

Brexit may also be increasing the volume of sales in excess of 500,000€, as many buyers who have the funds, will purchase and apply for Golden Visas – giving them more access year round to the Schengen Zone. We have already had sales this year driven very much by this 500,000€ threshold.

Sellers expectations on prices:

So far as sellers, since 2008 ish, 95% of my sales have been to cash buyers so most sellers I deal with don´t have mortgages – many have been paid off and those buying since 2008 didn´t take one.

This is very different to how it was pre-financial crisis when most bought with Spanish mortgages at high LTV (80% – 100% of price.)

A lot of the sellers I deal with are well into their 70´s. They are retired, own outright, have pension income and are under little to no pressure to sell other than they think it’s about the right time for them. So expecting them to suddenly drop their prices by 20% or more is not realistic. And we won’t insult owners whose properties are correctly and realistically priced by putting such offers to them – it just annoys people and does us no favours.

There may be people of working age who need to sell (cash flow issues with business back home etc) but I haven´t seen and am not seeing much of this at all.

Are prices falling in Tenerife?

So far, definitely not! They have been increasing overall as supply has tightened. The market is very buoyant and the lack of properties for sale combined with enormous demand from buyers has squeezed prices higher during 2022 and into 2023 – as might inflation across Europe, better to hold a property worth 200,000€ and have it increase to 220,000€, than have 200,000€ in the bank which will be eroded by inflation to the tune of 20,000€ in terms of spending power!

There are quite a lot of overpriced property listings – unfortunately some agents will tell an owner whatever they think they want to hear in order to get the listing. We see this very often where a property worth 210,000€ for example, is priced at 245,000€. The owner goes with the agent that offers the higher price and then sits for 12 month wondering why it has not sold! I don´t do this – I really dont see the point in overpromising and then not being able to sell the property and if you are an owner that this has happened to, you really should be ditching the agent that has done this and wasted your time and speaking to one who will be straight with you about what your property is really worth.

Will we see huge price drops on properties in Tenerife?

I really don´t think so. I just don´t see much of anything driving prices down. Given the demand at the moment, most properties that are priced sensibly will attract interest and very likely sell, so the impetus to drop prices further is simply not there. We are now 3 years into Covid, lockdowns, travel restrictions etc, a year into a cost of living crisis, war in Ukraine and rising inflation, and prices have not fallen, demand is higher than ever and sales are booming! It really does look like those sitting on the side-lines waiting for a huge crash have been left far behind.

Advice for buyers:

If you want to buy a well-priced property, find one that is for sale at a price you are happy with, that makes sense in the current market and make a sensible offer on it. Or use an agent to find one for you – we have huge networks of agents that we send requests out to when someone is looking for something specific, that’s pretty much the quickest way of finding something.

And if the property is affordable, dont lose it because they wouldn’t accept your offer – think about whether for the difference between between the asking price and your offer, is it worth losing and having to start all over with your search and then maybe not being able to find another?

Low ball offers:

We have all heard stories of how a friend’s brother´s mate got such and such for a bargain price after putting in a “cheeky offer” – blah, blah, blah…

As such, there are many would-be buyers who believe they must start really low – insultingly low “just in case…” I receive offers like this via email on a regular basis and in most cases I either just delete them or send them a link to this information about prices. There is simply no justification or reason to email a daft offer to me on a property that they haven’t even visited – and I won´t take it seriously, or bother the owner with it.

Keep in mind, if you see a property that looks a decent price at say 250,000€ – don´t waste yours and the seller’s time offering 190,000€. If they were going to be happy with 190,000€ and they were “desperate to sell” for some reason, it is very unlikely it would be listed at 250,000€…! It can really annoy the owner and if you are genuinely interested, its a really bad way to open negotiations.

If you still want that 250,000€ property for 190,000€ – the only way you may possibly get it is by waiting several years for prices to fall that low (which is very unlikely) or be in the right place at the right time when there is a desperate seller looking for a quick sale – but most of the time these will be snapped up by people who live here / are involved in property or who have very good relationships with the agents here who get them – it doesn’t happen often.

Take-away from all of this:

I wrote this paragraph almost three years ago after flights had restarted and sales really ramped up again and it has turned out to be very accurate:

If you have a good budget and know what you want and it comes up for sale – buy it. Because if you don´t, someone else will, especially if it is in a popular area and well priced.

That’s how I see the market, that’s what I have seen last year and so far, this year.

If you are selling a property in Tenerife and want clear advice on the best strategy, drop me an email or fill in the form below. What I am doing right now is very effective, it works and it is getting excellent results. I have a very different approach to most other agencies here – not going to go into details on how we have become so effective at selling as obviously, other agents read this website but if you would like a chat about how I can help you market and sell your property in Tenerife, contact me now and I will show you what we do.