Tenerife's real estate market continues to show remarkable resilience and growth as we move through 2025. With property prices climbing steadily and demand consistently outpacing supply, the island remains one of the most attractive investment destinations in Spain. Let's take a closer look at the numbers and what they mean for investors and homebuyers.
Key Market Statistics
- Santa Cruz de Tenerife sets new record – In July 2025, the average price reached €2,486 per m², the highest level ever recorded.
- Double-digit growth – Property values in Santa Cruz rose by 13.2% year-on-year in Q1 2025 (Tinsa).
- Canary Islands overall – Average prices increased by around 12.4% year-on-year, covering both new builds and resale properties (ISTAC, Canary Islands Statistics Institute).
- Province-wide record – In the province of Santa Cruz de Tenerife, average prices reached approximately €3,292 per m² in July 2025, while second-hand homes across the Canary Islands averaged €3,090 per m² (Canarian Weekly).
What's Driving This Growth?
High demand, limited supply
Demand for quality housing remains strong among locals, second-home buyers, and international investors. However, new developments cannot keep up with this demand, which creates upward pressure on prices.
Tourism and lifestyle appeal
With a year-round mild climate, thriving tourism, and a growing community of digital nomads, Tenerife attracts a diverse range of buyers and renters. This strengthens both sales and rental markets.
Geographic disparities
Premium areas like Costa Adeje, Los Cristianos, and Playa de las Américas continue to command the highest prices, while emerging areas such as Puerto de la Cruz or Golf del Sur offer growth potential at slightly lower entry levels.
Parallel growth in both new and resale markets
Interestingly, the gap between new developments and resale properties is small. Both segments are growing at around 12–13% annually, showing that the overall market—not just premium new projects—is in high demand.
Implications for Investors
- Higher entry costs – Delaying a purchase could mean paying significantly more in the near future.
- Rental yields remain attractive – While purchase prices are rising, short- and mid-term rentals can still generate 7–9% annual returns in prime tourist areas.
- Location is everything – Properties with ocean views, strong infrastructure, and easy access to services will continue to outperform the market.
- Potential overheating risks – Prices in some areas already surpass previous property bubble levels. Investors must stay cautious and work with reliable local experts.
By Salvaje's Expert Insight
At By Salvaje, we guide our clients through this dynamic market with:
- Tailored investment strategies – Helping you balance between premium hotspots and up-and-coming areas.
- Local expertise – Navigating regulations, taxes, and rental laws to protect your returns.
- Hands-on support – From property selection to purchase, management, and optimization for rental income.
Conclusion
Tenerife's real estate market in 2025 is defined by stable price growth and strong demand-supply dynamics. With annual price increases exceeding 12%, limited availability of properties, and growing international interest, the island offers compelling opportunities for investors.
The key to success lies in choosing the right property, in the right location, and with the right guidance. At By Salvaje, we are here to help you make smart, future-proof decisions in this exciting market.
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