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home impossible fuerteventura becomes

It becomes impossible to buy a home in Fuerteventura

Mortgages go through the roof with the rise in rates and only foreigners are able to buy

Buying a home in Fuerteventura is becoming impossible for an average family, and even for medium-high incomes. First because there is not much to choose from, nor is short-term land planning foreseen for developers to venture to build, and second because bank financing via mortgages has become prohibitive thanks to the monetary policy of the European Central Bank with the price of Money.

Another separate chapter would be the incidence of the holiday as an investment that leaves many homes out of the market and the competition of European savers looking for a second home, an investment or simply a house to live. The data are clear, the purchase of homes in Fuerteventura and on the islands is still in free fall.

The sale of homes registered in July a decrease of 18.25% compared to the same month last year, with a total of 1,931 operations. If compared to the previous month, the sale falls in the Archipelago with a fall of 23.04%. At the national level, the trend is the same, with a decrease of 10.53%, as reported on Wednesday by the National Institute of Statistics (INE).

In the Canary Islands, the sale of homes continues to fall. It was last March when the Archipelago registered the highest peak of the year with 2,734 transfers of property rights. The data for the month of July indicate a serious fall, placing this month as the worst of the course only ahead of April when 1,731 operations were registered. Of the foreclosures recorded in July in the Islands, 1,861 were carried out on free housing and 70 on officially protected properties. According to the age of the houses, 448 operations corresponded to new ones, and 1,483 were related to used buildings.

The rise in interest rates, inflation and even the decrease in operations due to the seasonal impact mark a downward line in sales operations, since March. The continuous increases in rates with which central banks try to cool demand to contain the inflationary process continues to have repercussions on the real estate market not only in the Archipelago, but also at the peninsular level. The cost of living has risen in all respects and the inflationary trend is already above 10% at national level, data higher than those desired by the European Central Bank.

In addition, the price of housing in the Canary Islands continues to rise and does not seem to contract in the near future. This is confirmed by the figures offered on Wednesday by the Ministry of Transport, Mobility and Urban Agenda, resolving an increase of 6% in the second quarter of the year, double what it did in the rest of the country. At the moment, housing in Spain costs an average of 1,793.2 euros per square meter, the highest amount recorded since the end of 2010; and in the Canary Islands it stands at 2,220 euros, according to the latest data offered by the Fotocasa portal. The decrease in the sale of homes in July was due both to the fall in operations on second-hand flats and those carried out on new homes.

The price of housing in the Canary Islands rises by 6% in the second quarter of the year, double what it did in the rest of the country

Housing in the Archipelago already exceeds the price of the real estate bubble of 2007, according to Fotocasa, and becomes the second autonomous community, after the Balearic Islands, to reach its historical maximum price in the second-hand housing market. In relation to the type of property, during July 5,056 urban properties were transmitted in the Canary Islands through 3,175 purchases, 738 inheritances, 201 donations, 9 swaps and 933 other operations. Likewise, 682 transmissions were made on rural properties, among which 187 inheritances, 324 purchases, 37 donations and 134 other operations were registered.

A total of 3,057 housing operations were carried out in July. In addition to the 1,931 purchases, 449 were inheritances, 109 donations and two swaps. The European Central Bank undertook its tenth interest rate hike last Thursday, raising the main lending rate to 4.5% and the deposit facility to 4%, both at levels unprecedented since the euro entered into circulation on 1 January 2002. This strategy, which aims to cool the economy to control inflation, makes access to financing for the purchase of a home more expensive, hence its negative impact on the behavior of the real estate market not only in the Canary Islands, but already accentuated globally.

At the national level

In the whole of Spain, the sales of registered homes fall in 14 communities. The most pronounced decreases occurred in Galicia (-22.8%), the Canary Islands (-18.2%), Navarra (-17.2%) and Madrid (-16.6%), while the most moderate were for the Basque Country (-2.5%) and Cantabria (-3.4%). On the other hand, Extremadura is the community where the sale of homes behaved best in July in year-on-year rate (5.25%) followed by Asturias (3.76%) and Murcia (0.17%). On the opposite side of the ranking are Galicia, the Canary Islands and Navarra with falls of 22.79, 18.25 and 17.19%, respectively. You have to go back to the beginning of 2021, when the sector was still suffering from the outbreak of the COVID-19 pandemic to find a similar situation.

In Spain, the sale of registered homes fell in 14 communities. The most pronounced decreases occurred in Galicia (-22.8%), the Canary Islands (-18.2%), Navarra (-17.2%) and Madrid (-16.6%), while the most moderate were for the Basque Country (-2.5%) and Cantabria (-3.4%).

The properties transmitted in the property registries, from public deeds carried out previously, reached 170,109 last July, 4.7% less than in the same month of the previous year. By sale, 8.7% fewer farms were transmitted than a year earlier, while those transmitted by donation fell by 5.4% annually; Those transmitted by inheritance increased by 3.5%, and swap transactions soared by 22.1%.

87.8% of the sales in July corresponded to urban farms, which include homes, and 12.2% to rural farms. The sales of urban properties fell by 9.1% year-on-year, while those of rural properties decreased by 6% compared to July 2022, to 81,005 and 11,257 operations, respectively.

It becomes impossible to buy a home in Fuerteventura.
Living my dream
4 users say Thank You to TamaraEnLaPlaya for this post
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On one hand the prices rise due to foreigners buying second/vacation homes. On the other the number of sales is dropping rapidly. (Hopefully) The price drop should follow the decrease in sales.
3 users say Thank You to G2HJei for this post
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A glut of new properties to buy in El Cotillo and an insatiable appetite to build more and and more and so destroying the idyllic place it once was. 

Should they need to stimulate the property market in general they could try lowering the exorbitant buying and selling taxes. The cost of owning a property in the sun I guess. You may as well call it a Sun tax.
5 users say Thank You to Alberto for this post
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The banks should be made to sell the ones they are holding onto.
5 users say Thank You to TrickyFox for this post
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100% agree. An easy solution around El Cotillo, Corralejo and Puerto. Subsidise it to make affordable housing for local workers.
4 users say Thank You to Bill for this post
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