
1. Why should people buy in Tenerife?
Tenerife is still one of the most popular investment/holiday destinations, and with more and more of the low cost airlines now adding this route to their schedules it is becoming even easier and cheaper to get here. Investment in the islands from major groups such as “Loro Park†with their new project “Siam Park†which is due to open early in the New Year means that Tenerife has more and more to offer to all age groups.
2. Where are the most popular places to buy, and why?
The most popular areas are still Los Cristianos and Playa de las Americas as these tourist areas have received major overhauls in the past few years resulting in a cleaner and more attractive beaches, shopping areas and restaurants etc.
3. Are there any upcoming areas that buyers should look at?
New areas now worth looking at are Fanabe, La Caleta and Adeje Golf, huge investment by some of the major 5* worldwide hotel groups have given these areas a huge facelift making them completely unrecognizable to people that have not been to Tenerife for a few years. These areas not only boast a championship quality golf course and high quality shopping/restaurant facilities but a selection of affordable high quality freehold properties.
4. With the general price wobble in the property industry at the moment, how would you describe the state of the market here right now?
During 2007 we have seen a slowing down of property sales and purchase due to the effects from the American and UK market places. However we are confident that 2008 will see a new interest in the property market here. In the past when the UK has had a poor summer people again start to look at the overseas areas again for their holidays/investment. Also people having experienced a good summer in 2006 in the UK and then possibly deciding to vacation in the UK have been reminded that this is not a cheap or affordable option, especially if they have children. Tenerife has virtually a 12 month season making this the ideal place to invest as rental opportunities to cover the annual costs of your investment are good. The UK cannot guarantee the weather meaning that if you have a poor summer your investment property may not be rented, this is not usually the case here.
5. What is the anticipated capital growth for property in Tenerife?
The increasing demand for property by investors or home owners and the increasing demand by tourists for accommodation means that the opportunity for both capital growth and income for investors is second to none, especially in the south of Tenerife, where a large percentage of all holidaymakers choose to stay. Capital growth for 2007/2008 is anticipated to be 12.3%.
6. What is the rental potential?
Rental potential is high, normally an owner can expect to be able to rent their property for 35 to 40 weeks a year on a holiday let basis. Long term rental demand is high and although this generates a lower income investors may prefer the security of knowing that their property is rented for 12 months of the year.
7. How much have prices increased over the past few years?
In the last 5 years property prices for a standard one bedroom apartment have increased from € 85,000 to a minimum of € 120,000
8. Are the prices levelling off, dropping or still rising now?
Although this year has seen a slowing down in the market property prices are still rising.
9. Have you noticed a change in the type of buyer recently?
There has been a trend of more and more 30/45 age group people purchasing property abroad as they see there UK property values increasing and they are able to release some of this capital by re-mortgaging. They are also earning higher salaries than before and with more and more people choosing not to have children in the early stages of marriage they have more disposable income available to invest abroad
10. Are properties taking longer to sell as compared to 6 months or a year ago?
In some cases yes as the market this year has been slower than normal, however properties in the popular and new areas are still very saleable.
11. What kind of properties are selling the fastest, and which are taking the longest to sell?
One and two bedroom apartments still have the greatest demand as these are more within the average persons budget and the rental potential is greater.
12. What is the average price for a one-bed apartment, a two-bed apartment and a detached 2 or 3-bed villa?
One bedroom apartment - € 130,000
Two bedroom apartment - € 185,000
Two bedroom detached Villa - € 350,000
Three bedroom detached Villa - € 500,000
13. Are there still any bargains to be had?
Yes, people that have purchased in the past and their circumstances have changed are offering their properties for sale at lower than market value to achieve a quick sale.
14. Have you had any unusual (humorous) experiences with property buyers?
We had a pair of gentlemen in Gran Canaria who wanted to buy an apartment that they could rent out and make money on. One of our advisors went to meet them in their 5 star hotel in Melonerous. However, when we arrived our gentlemen turned out to be a little man with a funny fishermans hat on and a tall lady/ man all dressed up in a summer dress, sandals, ear rings and covered in diamonds. She had long blonde hair to her shoulders and she seemed to take to me as if I was either her best friend or mum! When I had finally got over my shock we went looking at properties however she would not leave my side and the boyfriend got seriously jealous.
They found what they were looking for and went along to the notary where our lady/man forgot his/her pin number and couldn’t get any money out of the account or crdit card and had to postpone everything was postponed until they got back to the U.K. Talk about a seriously blonde moment.
The moral of this story is never expect to see what you expect to see!
15. How do you see the property market developing in the next 12 months, two years and five years?
Tenerife will see the release of several new developments in the next few years as the building monitorium finishes, there will be an excellent selection of “off-plan†opportunities for clients allowing them to purchase their dream holiday home without the need to find the funds over a short period of time. Buying off-plan normally means that you can purchase your property now only having to find 20 or 30% of the purchase price and you then have 18 months to 2 years to source the balance. Most developers work with the major Spanish banks to enable them to offer a 70% mortgage to overseas buyers. This mortgage can then be covered by the rental return from the property.