I’m Laura Leyshon and I’m Las Palmas’ resident property expert. I work for RE/MAX Cony Overseas, one of the city’s oldest estate agencies and the first RE/MAX office to open in Europe. Cony Overseas has an excellent local reputation and has helped hundreds of foreign buyers and sellers in Las Palmas and all over Gran […]
Every year, I write a guide to the current state of the Las Palmas de Gran Canaria property market and give my predictions for the next 12 months.
IMPORTANT: This article is an opinion piece based on my experience in the Las Palmas property market. It should not be used as a definitive guide to price trends. If you’re considering buying a Las Palmas property, please contact me for a detailed chat about the best options for you.
Las Palmas Property price evolution 2018-19
Average house prices across Spain are increasing at a steady rate. Areas popular with foreign buyers (the Canary Islands, Balearics and Costas) lead the way along with Madrid and Barcelona.
Prices in Gran Canaria are rising thanks to a tourism boom and a long-term recovery in the island’s economy. However, the increases are focused on high-demand areas popular with locals, and foreign buyer hotspots. Prices in areas away from the most desirable spots have not risen by as much, if at all.
In Las Palmas de Gran Canaria city, prices are on an upward trend. See this graph from Spanish valuation company Tinsa.
However, they are still significantly below the peak during the pre-crisis years.
As for Las Palmas property prices in 2019, I expect them to continue to rise. The island’s economy is doing well and local demand is healthy.
But, there are three factors that will moderate price rises in the near to medium term.
Tourist numbers are starting to drop from record highs
The first is an island-wide drop in the number of tourists predicted to arrive in 2019.
We’ve had five years of record growth thanks in large part to instability in competing destinations like Egypt and Tunisia.
However, we are seeing clear signs that the boom has now peaked. You can’t call a drop in numbers from record levels a slump, but any decline does affect island-wide income. Since many people live in the capital but work in the resorts, we have to take it into account.
As for Las Palmas tourism, It’s not yet clear what caused booming tourist numbers in the city. Are they due to overspill from the fully booked resorts, or is Las Palmas now a destination in its own right. The truth is probably somewhere in the middle.
Either way, expect the coming fall in Gran Canaria arrivals to affect Las Palmas and its tourist rental market.
Tourist rental saturation and uncertainty
The booming tourist rental market in Las Palmas seems to be approaching saturation. Prices are starting to drop along with occupancy rates.
If holiday let occupancy rates and prices continue to moderate, I’d expect some holiday let owners to drop out of the market in 2019.
Some will return their property to the residential rental market (residential rental yields are among the highest in Spain).
Others will decide to sell while property prices are high in desirable areas of Las Palmas.
If or when this happens, it will slow or reverse rising residential property rents and increase the supply of resale property.
New builds to shake up the residential Las Palmas property market?
The third moderating influence is the large number of Las Palmas new build properties in construction. There is a definite building boom in Las Palmas at the moment: Hundreds of new residential units are planned in the Guanarteme area of Las Palmas alone.
These are currently selling well, both completed and off-plan, at prices just above second-hand property prices. Local buyers are willing to pay a premium for new property in desirable areas.
However, with so many new properties due on the market, I expect them to moderate property prices in Las Palmas.
Las Palmas property prices in 2019
Will these moderating effects stall Las Palmas property prices in 2019 or is demand so strong that they will continue to rise?
I honestly don’t know and nor does anyone else.
I think, and hope, that prices will continue to rise steadily. They won’t approach the frothy levels we saw during the boom years before 2008 and there is still plenty of value in the city.
Las Palmas property prices: Zone by zone
As I’ve said, price rises across Las Palmas are not uniform.
In La Isleta barrio just north of Las Canteras beach, prices have risen fastest in the areas closest to the beach. There are still bargains in the areas further back.
Beachfront prices, always the highest in Las Palmas, are now approaching pre-crisis levels.
The beachfront has always been separate from the rest of the market: Buyers are willing to pay a premium for the views and prices vary considerably (but are never low).
The southern beach neighbourhood of Guanarteme, most popular with local buyers, is booming. Prices are now at the same level as the rest of the beach zones. There are a lot of new apartments planned for the area and this will affect its local character.
Alcaravaneras, just south of Mesa y Lopez, is another zone where prices have risen and almost caught up with the Puerto.
Moving south towards Arenales, prices have risen but are still reasonable. There are bargains to be had, especially if you are willing to do some refurbishment.
There are still real bargains to be had in areas close to the hotspots. I particularly like San Nicolás which is just over the road from both Vegueta and Triana. Prices here are much lower than in the old town areas even if they are only a street apart.
San Nicolás is one of the oldest barrios in Las Palmas and has a good mix of local atmosphere, period properties and a central location. Rental yields here are excellent as it is close to many business headquarters in Las Palmas and the university.
The outlying areas of Las Palmas, such as Tafira and San Lorenzo have seen average price rises.
In other areas of the city further up the hill and away from the centre, prices have risen slightly. In most cases, they are still not far above their historical lows.
Las Palmas mortgages and interest rates
European interest rates haven’t risen from the lows but the consensus opinion is that they will go up soon. At the moment, mortgage interest rates in Spain are as low as they get. Local banks have now warmed up to lending to homebuyers and foreign residents.
You can borrow up to 90% of a property’s value as a resident with a stable income (even for a second property).
As a non-resident buyer, It is almost always worth getting several mortgage quotes from local banks. Their rates and conditions are often better than mortgages from European banks. Speak to your estate agent for recommendations rather than paying for a mortgage broker.
New residents: Note that the banks want you to be resident for a year before they consider lending at the best rates.
Las Palmas rental prices: Booming but with potential headwinds
The average rental yield on a residential Las Palmas property is 7.7%, the highest in Spain. Rental prices are still on an upward trend (rising for over 40 months in a row).
The slowing holiday let market and boom in new construction should moderate them in the medium-term future. Rents have risen faster than salaries in Gran Canaria and are approaching the level where further rises are illogical.
The best yields are in areas close to the most desirable zones. Look at places where rents have gone up but property prices are moderate. Arenales, San Nicolás and parts of La Isleta are good options.
Las Palmas holiday let property in 2018
It’s now hard to find a property in a popular area of Las Palmas city with a good holiday let yield. Unless you are willing to refurbish and take a long-term view.
For foreign buyers who want to use their property for holidays and get some rental income, this is less of a concern. However, as a purely business investment, most buyers would be better off considering a residential rental investment. Buying several smaller rentals rather than one big tourist let investment is lower risk and yields just as much after expenses.
This is especially true as the long-term legal status of holiday lets in Las Palmas is still not clear. While I don’t expect the city to do anything extreme, politics is politics.
In the medium term, it looks like the market will moderate the impact of the Las Palmas holiday let boom all by itself.
Note: If you have a holiday let, do get your paperwork in order ASAP just in case.
Note that you can always rent your Gran Canaria property to family and friends. Restrictions only apply to advertising your property on holiday let portals like Airbnb and Booking.com.
New builds in Las Palmas
I expected 2018 to be a big year for new-build property in 2018 but it now looks like 2019 will be even bigger. There are multiple building sites in most areas of Las Palmas and almost all will be residential flats.
Buying off-plan in Gran Canaria is a safe process. Get good guidance and make sure that the constructor or promoter is following the (strict) Spanish rules.
Buying a Las Palmas Property in 2019
Right now, there is a lack of quality properties on the market in Las Palmas city. Those that do come up sell fast.
However, I think more owners will sell in 2019 due to rising prices and a fall in holiday let yields.
It’s essential to have your paperwork ready to go, your 10% deposit in a local bank account, and a mortgage pre-approved with at least two banks.
This way, when you find the right property, you are ready to sign arras and don’t risk losing out to a buyer with a low-hassle alternative to your offer.
Selling a Las Palmas property in 2019
If you plan to sell a Las Palmas apartment in 2019, please feel free to contact me for a free valuation and market study. The market value is property in Las Palmas depends on a lot of local factors and an accurate sale price is vital to getting the best possible deal.
I’m Laura and I’m Las Palmas resident estate agent. I’m one of the best-selling RE/MAX estate agents in Spain and I help dozens of buyers and sellers every year in Las Palmas and Gran Canaria.