Regions in the Canary Islands could be subject to new legislation to combat a growing rental crisis in some of its most tourist-populated destinations.
A total of 13 municipalities in the Spanish autonomous region, all of which are primarily geared towards tourists, have been denoted as “stressed areas” for their skyrocketing rent and lack of available housing. The names of these ‘at risk’ regions appear not to have been released.
Regions are classified as such if they meet one of two conditions. Firstly, if the average cost of mortgage or renting – as well as basic expenses and utilities – exceeds 30 percent of the average income or average household income, a condition which the regions all meet.
Secondly, the classification applies if the cost of buying or renting a house has seen cumulative growth of at least three percent above the increase in the Canary Island’s Consumer Price Index over five years.
The average rental price in the Canary Islands at the end of 2023 was 15.1 percent higher compared to December the previous year.
Las Palmas in particular rose to become the fourth most expensive province in Spain, with a 19.37 percent increase in rent. Measures such as price caps have been suggested as responses to the “stressed areas”.
However, none of the municipalities has moved to be officially declared a stressed area. Las Palmas de Gran Canaria and La Orotava have expressed a willingness to do so – but they have yet to announce anything official.
Canary Weekly report that sources close to the government of the Canary Islands say that if the issue persists, the authority may implement new measures to address it.
The sources reportedly said the current situation was characterised by a “complete mismatch between the purchasing power of demand and the price”.
The real estate sector strongly opposes any such measures, however. This is due to the fact that rental housing could be reduced in the event of government interference, as owners of potential new rental properties may be discouraged from the market, the Real Estate Federation said.
They argued any measures to restrict the market would therefore only further reduce supply, and push prices up further.
