At a time when the global property sector is struggling through never-ending doom and gloom, here in Tenerife, there does seem to be a small break in the clouds.
Many people on the island suffered through the first years of the economic crash as the crisis sank its claws into the markets of UK and Europe. As jobs were lost and belts tightened, people in the affected countries could no longer afford their annual vacation. With decreased numbers of tourists arriving on the island over the last five years and their respective “spend per head” becoming smaller and smaller too, many who had relocated here and built businesses reliant on the tourist trade faced tough decisions.
Almost every expat resident who still lives in Tenerife knows of someone who has had to leave the island due the current global financial situation as friends, family members and work colleagues decided to cut their losses and return to UK or Ireland as a result of the ever deepening crisis.
Tenerife Property Bubble
Prior to the economy crashing worldwide, Tenerife property had been in an ever-inflating bubble. Properties that were once affordable and reasonably priced quickly became over-valued with some experiencing a ten fold or larger increase in just a few years. The prices being asked for modest apartments or small townhouses were unrealistic while those for more luxury properties were simply off the charts. Of course when the bubble burst in Tenerife it went with a bang. Some mortgage holders, now stuck with paper held by the bank that was worth three times more than the property, chose simply to default.
The silver lining is that in the aftermath of the crisis, property prices in Tenerife are flattening out, with property owners now having a realistic understanding of what their property is really worth. The days of over inflated prices are well and truy over, opening the door to a new generation of property buyers who have set their sights on a new life in the sun.
Tenerife Property Market
If you imagine being stuck in the UK on a grey and rainy morning with the prospect of getting the kids to school then struggling through traffic to get to work, it is not hard to see why buying an apartment in Tenerife, with its year-round mild climate and glorious sunshine is such a popular daydream for so many Brits.
The weather gives Tenerife a great advantage over other destinations both as a holiday destination and as a place to move to to raise your family or start a business. Being located within four hours of travel, the island is far enough away to be ‘exotic’ yet close enough to make travel easy and relatively inexpensive. Consequently, it is one of the holiday destinations that remained ‘do-able’ for many, even through the worst of the crisis and Tenerife is also well placed to be one of the first destinations to bounce back once the dark clouds of the economy start to drift on by.
Those who are looking to buy property in Tenerife, may be looking for a new home in the sun to raise their kids or they might be buying an apartment as an investment, one that they can let out to holiday makers and which therefore will pay for itself in rental fees. This has long been a favourite tactic with investors in Tenerife and it is still a very popular choice in 2011.
There may still be a few thunderheads on the horizon but there but there does seem to be a slight break in the gloomy clouds of global economic recession and Tenerife looks like it could be one of the first places to enjoy a long awaited ray of financial and economic growth.
Thank you to Lupain Properties S.L. for this positive report on the Tenerife property market. Please visit their website for more information on property in Tenerife and to find a wide range of properties to sell and rent on the island.
Searching for Property Online with No Clear Plan
There is a lot of great property in Tenerife. Many of the houses and apartments for sale right now look so fabulous in the photographs displayed on the estate agent website that it is easy to get distracted from your actual requirements. Don’t start your online search until you know:
- what is the maximum price that you will pay for your new property;
- the size of the area in which you want to live and any specific requirements of the location;
- the number of rooms you need;
- is a garage, balcony/terrace or communal pool a deal breaker?
There will be items that you are willing to compromise on but by having a clear list of specific requirements you are much less likely to be swayed by pretty pictures or clever descriptions. You will save time, money and visits to houses that are really not what you are looking for.
- Forgetting About Added Purchasing Fees
Purchasing a property in Tenerife, as elsewhere, involves a number of costs over and above the listed price of the house. By taking into account the conditions of the mortgage and the additional expenses you will be able to take it in stride if the Euribor rises and you will have money set aside to meet taxes, pay the notary and if it is a part of the purchase agreement, meet the expense of the added value tax (a fee which is considered to be borne by the seller by law but which often in reality falls to the buyer).
- Not Considering the State of the Property Before Purchase.
Some properties can be bought at bargain prices because they are in a state of disrepair and need some renovation before moving in. It is common for those who have not had the experience of renovation a property to underestimate the amount of time and money involverd in getting a house or apartment back to a habitable state. While it is true that there are bargains to be had, you would be best advised to seek professional estimates of the building work required and seek appropriate discounts accordingly.
- Buy in Haste, Repent in Leisure
In the current economy the seller will be keen to press for a quick sale. Real estate agents are professional sales people and some will be very skilled at subtly (or not so subtly) pushing you to a buying decision. But a house is not an impulse buy. You need to take a breath and consider the purchase from all angles. Is it right, does it fill all the requirements you noted down? Is it well located, central to your needs? Is the financing favourable?
For many expats, the coastal areas of Tenerife seem like the ideal place to live. The major tourists’ resorts of Los Cristianos and Las Americas glitter like diamonds after the dull urban sprawls of grey UK cities. But is buying a house in the tourist district really what is best for the family? After the glitter has worn off a bit, many reconsider their first decisions and move to locations like Adeje town or farther out to Arico where larger properties can be had for much less money.
In summary, the best advice is to consider your needs, take your time and do not be pressured into a snap decision. Don’t forget to also consider the Spanish property portals when searching for property in Tenerife, where you might just find a hidden gem. The website Ventadepisos.com has listings for Tenerife and other cities.
When people first move to Tenerife and rent in a complex or buy property which is contained within a complex, they can sometimes find that the community management is a little … well … complicated.
Take my neighbour, for example. When she and her husband moved into this community they embarked on a home improvement project which involved building a new floor and painting the exterior of the house. They did a lovely job and their house is in keeping with the general appearance of others in the street but that did not prevent them from receiving a visit from La Presidenta to give them a telling off for not following community guidelines. And this, despite the fact that the community president has herself extended her property by adding a new floor and extending her garden.
This interference in what you do with your own property might seem at first to be a ridiculous intrusion but actually when you buy property on a complex you are bound by the community rules as to what you can do to that property. If the rules say you must have dark stained wooden shutters then you won’t get away with a bright sunny, yellow. Same with the height of the walls or the materials used in building an extension.
Then there are the community fees and the transparency or lack thereof of what is being done with the money you pay into the community each month. In one local complex both the president and the administrator were recently bounced out in what would have been a bloody coup in the old days. The complex residents had had strong suspicions of book cooking for quite a while and when evidence was finally obtained, the two were trounced at the next election committee. Whether legal action will be taken remains to be seen.
But there are great complex communities. The ones where the focus of the committee is not to line their own pockets but rather to improve and enhance the complex for all its residents. Rent or buy on one of these complexes and your stay there is likely to be a happy one.
Newcomers are often at a loss of where to find cheap, long-term accommodation in Tenerife. Even the B & B’s charge an exorbitant amount for a single room if you look at the charges over a month. Flat sharing is always a good idea when you are looking to save on rent but the question is, where do you hear about flat share offers?
Generally, the Cultural Centre notice boards are the place to look although you don’t have to bother today because this one in Playa San Juan would be hard to beat:
Double bedroom with own bathroom in Playa San Juan for only €200 per month.
- 2 minutes walk to the beach
- big roof terrace where you can see the sea
- Frequent buses to all areas eg: 25 minutes to Playa de las Americas, 10 minutes to Los Gigantes.
- Playa San Juan itself is a good location. Plenty of restaurants and bars, internet cafes and two beaches…
||This is a great deal for the money and will especially suit those that are working nights or in the entertainment business as the other tenants are night owls.The cost includes electricity and gas bills so no extra to pay. You will be asked for a deposit and if you want to fit in with the other tenants you’ll whip out the hoover now and then and clean up your own dishes. 😉