Increase in real estate prices in the Canary Islands: fault of the Italians?

increase in real estate prices in the Canary Islands

It's all the Italians' fault

"It's all the Italians' fault if rents and house prices have grown so much in recent years!"

It's a phrase that anyone who has lived in the Canary Islands for several years will have heard repeated over and over again, like a broken record.

People struggle to distinguish their perception, derived from their personal experience, from reality which, instead, very often tells something different.

Most of those who arrive on the islands look for Italian friends, Italian intermediaries and professionals, Italian restaurants and bars, businesses run by Italians, Italian social groups... it is logical that they then develop the perception that everything revolves around Italians!

But if it is true that a person's perception is by its very definition "subjective", it is equally true that numbers, as such, are objective and valid for anyone.

So let's go back to the initial statement, arguing it with some numbers.

Numbers and percentages

The population of the Canary Islands is 2,250,000 people, of which 320,000 (14.2%) are foreigners.

Of these foreigners, the 17% are Italians. Therefore, in relation to the entire population of the Canary Islands, Italians represent 2.2%.

Could this 2.2% population drive the market? In theory yes, if he owned the majority of the properties.

Let's see then, drawing from official statistics, how many foreigners buy in the Canary Islands and how many of these are of Italian nationality.

Let's start from the fact that real estate sales by foreigners in the Canary Islands represent 28.2% of the total. Of this percentage, only 5.1% are made by Italians.

This means that, for every 100 sales carried out in the Canary Islands, 28 are by foreigners and 1.4 by Italians.

So can Italians influence the market?

Assuming for simplicity that all the properties purchased go on the rental market, therefore, one can easily understand how the numbers reported above are in stark contrast with the statement reported at the beginning of this post.

If, in fact, all Italians at a certain point decided by mutual agreement to double the rent, prices would increase on average by 1.4%.

Similarly, to generate a 10% general increase in prices, all Italians would have to ask 8 times more than others, of any nationality.

The truth is that the territory of the archipelago is limited, the properties are limited, the building permits are limited (fortunately), but the number of people who would like to move to live, or more simply to spend their holidays, is virtually unlimited. This, obviously, without having any kind of relationship with nationalities.

Therefore, if tomorrow the Italians disappeared from the Canary Islands, the sales season would certainly not open, contrary to what many believe and suggest.

This is what the market says and this is what the numbers say: the rest is pure perception.

Article by Marco Sparicius Canary Islands Real Estate Consultant

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