In recent years property prices have been depressed in all areas of Spain, including the Canary Islands.
Thanks mainly to the financial crisis and lack of lending from the banks, property purchases were limited to those that had funds to hand and as such, fewer buyers meant a reduction in prices.
Now the crisis is over…or at least for most of the world, prices are picking up…but are prices in Tenerife rising at a crazy rate?
Let’s have a look at a couple of things to suss it all out.
Last week, I was having a conversation with another estate agent here in Tenerife who was here when prices were at their highest.
He said that he remembers prices going sky high and that, at that time in 2007-2008, he felt that they couldn’t go any higher.
Turns out he was right, the crisis came and bit everyone in the backside and put pay to rising property prices everywhere, including Tenerife.
Fast forward to 2015-2016 and prices seemed to be stabilising.
They didn’t seem necessarily to be on the rise, but you could certainly see a confidence in property prices that meant there were no more falls…30-35% drops since 2008 were enough to rectify the market for the time being.
Through 2017 and now entering 2018, prices do seem to be on the rise again.
10 days ago, we had an offer to buy a 1 bedroom apartment.
The offer was 93% of its asking price, a very good offer but it wasn’t accepted by the sellers.
A few days later, the buyers then increased their offer to 96% of the asking price for the property…the sellers still didn’t accept, in fact, it gets worse, they’ve now decided to increase their sale price.
Now, if this apartment was under-priced in comparison to others on the same complex or even other comparable properties in the same town, then you could understand their sentiments.
You’d accept the fact that they wanted to increase their price and make the most of a rising property market, but sadly, the property was the most expensive on the complex.
Who are we to say that the property is expensive, the famous cliché of “something’s only as valuable as someone’s willing to pay for it” is always at the forefront of our minds…we’re here to take note of the actual agreed sale prices of property and price other properties for sale accordingly.
Of course, there’s always got to be a property for sale that is the most expensive on the complex…it stands to reason.
But to not accept an offer that’s so close to your asking price and then increase the asking price – and at the same time, be the most expensive property on the complex, is getting out of hand.
I’ve just been offered a 3 bedroom apartment in a complex that would have probably been built in the 90’s.
The complex has no lifts and the apartment that I’ve been offered is the penthouse property.
Great views from the massive terrace, fully refurbished apartment and thankfully a Jacuzzi bath…you’ll need it after having walked up those stairs.
To put this in perspective, although I’m not going to mention complex names or towns, I recently had a modern 3 bedroom apartment, totally up to date, the building would have been built in the early 00s, with a lift, in the same town…in fact, just 5 minutes’ walk away. Again, a massive terrace with great views, underground parking but no Jacuzzi bath…well, it wasn’t needed, there was a lift in the building.
That property has been sold recently and was being marketed for 76% of the price of the one I’ve just been offered today, and in my opinion, it was worth every cent…
The thing is, I can’t see the value of the other apartment, I can’t see that this other apartment is worth another 26% increase. Needless to say, I’m not going to be offering the other one for sale.
Prices generally rise in a market where we’ve got an excess of buyers ready, willing and able to buy and when that happens, sellers can increase prices in accordance with what’s been sold recently in the same area, but just increasing prices or making prices up like the previous 2 examples is just getting out of hand.
On the other hand, because I’d only just arrived here in 2009, I don’t have that experience of pricing and so personally I think that things are still on the way up, there are many different factors that are affecting the price rises this time, such as different nationalities buying and selling.
It doesn’t matter who gets it right in that conversation, one thing’s for sure…even if you take out of the equation the examples from above, things are definitely on the up and if you’re thinking about buying or selling, now’s as good a time as any other…let me know if there’s anything I can do for you.