Housing Crisis Tops List of Canary Islands’ Most Pressing Problems
The housing crisis heads the list of the most urgent problems in the Canary Islands. The difficulty in accessing a flat or a house—whether through purchase or rental—echoes the exorbitant prices of around 2007, when the property bubble was about to burst, which it finally did in October of that year.
Prices Surpass Pre-Crash Growth Rates
The latest data from Spain’s National Statistics Institute (INE) on the House Price Index (IPV), corresponding to the third quarter of 2025, shows a year-on-year increase in the cost of homes in the Canaries of 12.2%. This is even higher than in the months preceding the bubble’s explosion, surpassing the rate at which prices were growing 18 years ago, just as the Great Recession was about to begin. Only at the start of 2007 were house prices experiencing a sharper rise than now.
Echoes of 2007: Easy Credit and Speculation
Spain in those years was marked by the granting of easy credit—clearly unsustainable for the middle and lower-middle classes—subprime mortgages, and rampant property speculation. In this climate, home purchases saw price increases of 13.1% nationally and 14.6% in the Canaries between January and March 2007; 13.9% in the second quarter; and 11.6% in the third, the precursor to the crash of October 2007.
Current Crisis Driven by Supply and Demand Imbalance
But what about now? In the current context, the difficulty in accessing housing is marked by a supply that does not match the enormous existing demand. Consequently, prices continue to rise, yet still maintaining a high margin of willing buyers prepared to assume purchase costs that already exceed €3,123 per square metre in the Canaries, according to the latest data from the Idealista property portal.
Construction Fails to Meet Overwhelming Need
In the aim of increasing the housing stock to resolve the imbalance between supply and demand, the construction of homes is progressing at an “insufficient” rate, as described in the annual report by the Economic and Social Council of the Canary Islands (CES). Construction in Santa Cruz de Tenerife increased by 118% compared to 2023—coming from record lows—but in Las Palmas it fell by 14%. However, the combined total for both provinces does not exceed the annual average of 3,000 homes built, amidst a housing emergency where at least 10,000 houses per year are needed.
Adding to this is the accumulation of housing applicants, who have been unable to access a property for years and remain waiting. The current need is estimated at around 90,000 homes across the Islands. Furthermore, unlike the national picture, the Canaries, along with the Balearic Islands, present a peculiar trait due to their tourist appeal, which further reduces the supply available for the resident population due to properties being transferred to the holiday rental market.
Record-Breaking Price Rises for Existing Homes
In this context, the Archipelago has now seen 45 consecutive quarters of price increases. The 12.2% rise in the third quarter of 2025 exceeds the 11.6% recorded in the same period of 2007, the final months of the long bubble period. Moreover, in the case of existing homes, any previous record in the statistics—here at a national level—has been broken, setting a new historical record. The latest figure from the House Price Index (IPV) shows an increase of six tenths, reaching 13.4%. The Canaries are keeping pace. Between July and September, the increase in the price of second-hand properties was 12.2%, a percentage similar to that of 2007 and with an upward trend in recent quarters.
New Build Trends and a Bleak 2026 Forecast
New builds, meanwhile, are moderating their rise nationally to 9.7%, 2.4 points less than the previous quarter and their smallest year-on-year increase since the third quarter of 2024. In the Islands, the percentage increase is higher (12.4%) and, unlike in the rest of the country, grows by 1.7 points.
As if this general picture were not worrying enough, the rates reminiscent of a speculative 2007 with exorbitant housing prices will not stop in 2026. The latest Fotocasa property report forecasts another year of growth in house prices and worse accessibility for both renting and buying. The conclusions of the annual real estate market review point to increases above 15% and an average price exceeding €2,830 per square metre. A threshold already surpassed in the Archipelago in December 2024, which gives an idea of the region’s complex property situation.
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