canary islands house prices surge exceed 2007 peak

Canary Islands Housing Prices Surge 17.8%, Exceeding 2007 Peak

Spanish Property Prices Soar, Canaries Lead the Surge

House prices in Spain grew by 14.3% in the first quarter of the year compared to the same period last year, an 11.8% rise in real terms—after discounting inflation—reaching an average of €1,987 per square metre, according to the latest report from Tinsa by Accumin. In the Canary Islands, the increase is even more pronounced, hitting 17.8% compared to the first quarter of 2025. This follows a year where prices had already surpassed those seen during the property bubble, and they continue to climb. With these figures, the archipelago is among the 14 autonomous communities registering nominal year-on-year increases above 10%.

A Declared Housing Emergency With No Price Controls

It is worth recalling that the Canary Islands have been in a declared housing emergency since 2024. However, the regional government (CC and PP) has not applied the state Housing Law, which would allow for the designation of stressed areas and limit rental prices, among other measures. This is despite several municipalities having formally requested such action from the island’s government.

Provincial Breakdown: Tenerife Sees Sharp Rise

The most intense price increases are located in the provinces of Toledo (+23.2%), Albacete (+19.6%), Madrid (+19.2%), Santa Cruz de Tenerife (+19%)—while Las Palmas de Gran Canaria recorded a 14.6% rise—Alicante (+18.3%), and Castellón (+18%). Zamora is the only province where housing is cheaper than a year ago (-3.8% year-on-year). Since the low recorded after the property crisis (summer 2015), new and used housing in Spain has become 68% more expensive but remains 4.5% below the 2007 peak. In real terms, however, the value has increased by 32% since the 2015 low and remains 34% below the 2007 highs.

Market Dynamics and Geopolitical Uncertainty

Compared to the last quarter of 2025, the increase between January and March 2026 was 3.2% quarterly. The year-on-year variation, which is three-tenths higher than in the last quarter of 2025, has intensified uninterrupted since the fourth quarter of 2024, when prices marked a year-on-year increase of 4.2%.

“At the start of 2026, the impact of past interest rate cuts, which was very present in January 2025, has already been absorbed by the market, and the trend towards a stabilisation of transactions is reasonable,” stated Cristina Arias, Director of the Research Service at Tinsa by Accumin. The report also warns of uncertainty for the coming months due to the Middle East conflict, which could affect inflation and reference interest rates, potentially impacting residential demand.

Thus, housing demand faces opposing pressures. On one side, a potential cooling from economic uncertainty, loss of purchasing power, and higher mortgage costs. On the other, dynamism from investment in an asset seen as a good refuge against inflationary episodes. “Geopolitical instability could fuel a new increase in new-build housing prices and accentuate the general population’s difficulties in accessing housing,” Arias pointed out.

Regional Rankings and Affordability Strain

Of the 19 autonomous communities and cities, 14 show nominal year-on-year variations above 10%, up from eleven in the previous quarter. The greatest increases in new and used housing prices are in the Community of Madrid (+19.2%), Valencian Community (19.1%), Castilla-La Mancha (18.8%), Canary Islands (17.8%), Cantabria (16.2%), Region of Murcia (16%), and Balearic Islands (15.5%). At the opposite extreme, Extremadura, Ceuta, La Rioja, and Melilla show growth below 8% year-on-year.

Quarterly price growth exceeds 4% in Castilla-La Mancha, the Canary Islands, Castilla y León, the Region of Murcia, and the Valencian Community. In nominal terms, the regions of the Balearic Islands, the Community of Madrid, Melilla, and—new this quarter—the Canary Islands have now exceeded the peak levels reached during the 2007 bubble. If the effect of inflation is discounted (in real terms), only the Balearic Islands is on the verge of surpassing this maximum, sitting just 0.1% below.

Despite everything, housing affordability remains at reasonable levels nationally, with an average effort rate of 33.9%, compared to 33.3% the previous quarter. However, the number of provinces exceeding the 35% threshold—considered a reasonable effort level—remains at eight: Balearic Islands, Málaga, Madrid, Barcelona, Alicante, Vizcaya, Santa Cruz de Tenerife, and Cádiz. The greatest strain is in the Balearic Islands, where the local population faces an effort rate of 54%. They are followed by Málaga and Madrid, at 49%.

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