Canary Islands Housing Crunch: Why Tenerife and Gran Canarian Are Running Out of Homes

The Canary Islands are facing a mounting housing crisis that’s quietly reshaping life across the archipelago. Recent data from property portal Idealista reveals a staggering 13% drop in homes for sale over just one year. The situation is even more acute in the bustling capitals of Las Palmas and Santa Cruz, where available properties have plunged by nearly 20%. This sharp decline isn’t just a number, it’s a warning sign of growing pressure on residents, buyers, and the entire property market.

Greg Rodríguez, Director of Triumph Real Estate, paints a clear picture of the crunch. In Gran Canaria alone, the housing stock listed has shrunk from nearly 6,000 to around 4,200-4,500 a 15% fall that’s shaking both sales and rental markets. What’s driving this squeeze? Rising demand fueled by foreign buyers eager to invest, combined with an ever-tightening supply that shows no sign of relief.

Several forces are tightening the grip on available housing. The surge in short-term holiday rentals, which offer far better returns, is pulling properties off the market for locals. Meanwhile, new construction has all but stalled not least due to soaring building costs, which have jumped from €700-800 per square metre to as high as €1,200. Smaller developers are being priced out, while bigger firms hesitate to launch new projects, leaving fewer homes to meet the swelling demand.

Rodríguez warns that the situation won’t improve overnight. He stresses that only a boost in new, affordable housing, particularly protected and public homes combined with tougher rules on holiday lets and foreign ownership, can start to ease the crisis. Without these changes, the Canary Islands risk pricing out locals and destabilizing communities that have long balanced vibrant tourism with sustainable living.

This housing shortage is more than just a market blip, it’s a turning point. How the islands respond now will define their future livability and economic health. With demand soaring and supply shrinking, the Canary Islands stand at a crossroads: adapt and rebuild, or face deeper challenges that could impact generations to come.