La Orotava housing report reveals staggering rent increases
A rare, in-depth study into the property market in the northern municipalities of Tenerife was commissioned by La Orotava Town Council. Dated November 2024 and focusing on the period from 2019 to 2023, with comparisons going back to 2001 and an analysis of 2024, the report was presented at the latest local Urban Planning committee meeting, held in early July. Although discussed at that meeting, it was not initially distributed to municipal groups, but has now been handed to the opposition. It lays bare what has long been obvious in the town, across Tenerife, the Canary Islands, Spain, and much of the Western world: house prices and rents have soared across nearly all districts, with little sign of the trend abating significantly in the future.
In the case of La Orotava, the conclusions of this exhaustive analysis, carried out by the firm Deloitte, show that over the period studied, the average rental price rose by almost exactly 68%, with eye-watering increases of up to 129% in areas of the upper part of the municipality, including Pinolere, Bebedero and Aguamansa. While such a jump is striking and even startling at first glance, the report offers fascinating detail, dissecting the local property market district by district across the largest municipality in the island’s north.
Population stability masks shifting household dynamics
Between 2019 and 2023, the population of La Orotava remained practically stable, with a variation of just +0.3%. However, as the report highlights, the number of households continued to grow at an annual rate of +1.1%, placing greater pressure on the residential stock. “This growth has occurred alongside a reduction in the average household size, which has fallen from 2.7 to 2.3 people over two decades (-0.4 points), reflecting changes in family structures,” the findings state.
While the overall population did not see a significant increase, the foreign population did, rising by 8.6% during those years. For those behind the analysis, this confirms “a progressive socio-demographic diversification of the municipality, a trend that directly influences the type of housing demanded and reinforces the importance of urban planning that is sensitive to the needs of each district.” During the five years analysed, the local population grew by 425 inhabitants (+1%), with a breakdown of 94% Spanish and 6% foreign nationals. In terms of age, 59% were between 40 and 59 years old, alongside those aged over 60. Between 2006 and 2023, these age groups grew by 34% and 35% respectively, confirming the population ageing seen in other areas, while between 2001 and 2021, households increased by 3,508, an annual rise of 1.1%.
Sales and rents diverge sharply across districts
These figures carry significant weight in both sale and rental prices, according to the report. While rents rose by an average of 67.9% in La Orotava, purchase prices increased by 10%, outpacing regional CPI growth (+15%). Among district-level sales, price rises in Las Cuevas-Los Gómez stand out, with a 52% increase, an area characterised by numerous detached houses and single-family homes with adjoining plots, as well as the historic centre (+41%). This contrasts sharply with the stability seen in populous areas such as La Perdoma, which saw an increase of just 1%, and even more so with the 1% decline recorded in areas like El Durazno.
Rental prices, however, revealed far greater pressure, highlighting not only that disproportionate increase in El Bebedero, Pinolere and Aguamansa, situated around 900 metres above sea level, but also a 53% rise in other upper districts, such as Chasna. “These differences reflect very distinct local dynamics and consolidate rental as the most strained segment of the property market,” the report concludes.
The analysis also looks at household income during the period, which rose by an average of 22.9%, revealing a clear gap when set against the 67.9% surge in the rental market. This disparity has meant that the rent burden ratio is more than double that for buying a home, with an increase of 42%.
Land availability for new developments
In a separate section, the report examines the available land in La Orotava for up to 5,554 new homes, split between urban land (974 homes in the short term) and developable land (4,574 in the medium and long term). Most of the planned development is concentrated in the central district, which provides 884 short-term urban homes and 3,966 developable ones, representing more than 85% of the total forecast. Other districts, such as La Perdoma, San Antonio, Benijos and El Bebedero, Pinolere and Aguamansa, also include new units, albeit in smaller volumes (405 and 188 respectively). In all cases, the timeline for bringing these to market ranges from less than two years to more than five, with only 18% of the total (974 homes) achievable in the short term.
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