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The huge cliffs of Los Gigantes on the west coast of Tenerife dropping into a dark blue sea, a small marina below, late afternoon sun.
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WhyTenerife

Demand all year, little new supply and the lowest tax on new homes in this comparison, at prices well below the Costa del Sol. Figure by figure against the Costa del Sol, Valencia, Madrid and Barcelona.

Figures as of November 2026

The case

Demand all year, little new supply

Tenerife combines three things the other four markets do not. Winter is high season: in January, hotels in the province are 75% full, against 42 to 51% in the others. New supply is limited: it has the fewest building permits of the five. And new homes carry the lowest purchase tax, about 8% against 10,75 to 11,5%.

New builds are priced about 24% below Málaga and rose 12,4% over the year, second of the five. In the last crash, prices here fell least: about 36%, against 48 to 52% elsewhere.

A €20–30M project fits this market. A hundred homes is about 3% of the new-build sales the province records in a year. It suits a well-located project with pre-sales. If you need to place hundreds of millions quickly, Madrid is the deeper market, and we say so below.

The Orotava valley in Tenerife seen from above: banana terraces, white houses and church domes of the old town, with snow-free Teide volcano rising behind in clear morning light.
The Orotava valley. Illustration.

At a glance

Where Tenerife stands out

New-build price against winter demand

Each dot is a market: further left is cheaper to enter, higher is fuller in January.
Hotel occupancy in January
40%60%80%€2.000€3.000€4.000TenerifeCosta del SolValenciaMadridBarcelona
New-build price per m²

A year without a low season

INE 2025, by province. The shorter the line, the more even the year. Madrid is even too, but at a lower level.
January August
Tenerife75%81%
Madrid51%55%
Barcelona48%77%
Valencia43%75%
Costa del Sol42%80%

In numbers

Six measures side by side

New-build price per m²

Registradores, 12 months to Q2 2026
Madrid€3.911/m²
Costa del Sol€3.495/m²
Barcelona€3.348/m²
Tenerife€2.638/m²
Valencia€2.007/m²

About 24% below Málaga.

New-build price rise over the year

Registradores, Q2 2026
Valencia15,6%
Tenerife12,4%
Costa del Sol10,5%
Barcelona6,3%
Madrid4,8%

Second of the five.

Building permits per 1.000 homes

Tinsa, Q3 2026
Costa del Sol8,5
Madrid5,4
Valencia4,9
Barcelona4,2
Tenerife3,7

Fewest of the five: less new supply coming.

Tax on buying a new home

Regional rates 2026; about 8% on Tenerife
Barcelona11,5%
Valencia11,4%
Costa del Sol11,2%
Madrid10,75%
Tenerife8%

The lowest of the five.

Mortgage cost as a share of income

Tinsa, Q3 2026
Madrid53,5%
Costa del Sol53,3%
Barcelona45,2%
Tenerife40,1%
Valencia34,5%

Lighter than Málaga, Madrid or Barcelona.

Fall from the 2007/08 peak to the low

Our calculation from Tinsa, Q3 2026
Barcelona52,3%
Costa del Sol50,5%
Valencia50%
Madrid48,4%
Tenerife36%

The smallest of the five.

Playa del Duque in Costa Adeje, Tenerife: a golden sand beach, a palm-lined promenade and elegant low white villas, calm turquoise water, clear sky.
The coast at Adeje. Illustration.

Why Tenerife

  • No off-season

    In January the Canaries receive more tourists than in August, and hotels in the province are 75% full. On the Costa del Sol and in Valencia, that winter figure is around 40%. For owners, that means a home they use and can let all year.

  • Little new supply coming

    The fewest building permits of the five markets, on an island where land is limited and licences take time. That barrier protects whoever gets through it.

  • Entry price with momentum

    New builds cost about 24% less per m² than in Málaga. Their prices rose 12,4% over the year, ahead of Málaga, Barcelona and Madrid.

  • The lowest tax on new homes

    About 8% against 10,75 to 11,5% elsewhere. On a €500.000 home that is around €15.000 less for the buyer, which supports the sales price.

  • New projects are selling

    Aedas had 85% of its 160 homes at Solum in Guía de Isora sold when the first phase was handed over, according to the company. Metrovacesa is building 138 homes in Adeje.

  • The smallest fall last time

    After 2007, prices in the province fell about 36% from peak to low, against 48 to 52% in the others. They still fell, so we underwrite for it.

  • A route to land, and a local buyer

    Since 2024, unbuilt tourist and commercial plots can be developed as housing, with a share of protected housing. Since 2025, Canarian companies may invest their tax reserve (RIC) in homes for long-term rent. We found nothing comparable in the other four regions, though our search was not exhaustive.

  • Rental without a cap

    No rent cap is in force, and the gross yield is level with Málaga and above Madrid on our calculation. Mortgage costs also take a smaller share of income than in Málaga, Madrid or Barcelona.

What you give up

  • A smaller exit market

    About 12.000 home sales a year, against 36.000 to 81.000 in the others. A project fits easily, but selling up in one go takes longer.

  • Less institutional proof

    We found no large institutional deal in Tenerife and no published yield for rental blocks. Madrid is where that capital goes.

  • Slower growth overall

    Across all homes, prices rose 9,9% over the year, the least of the five, and dipped 0,7% in the latest quarter. New builds are holding up better.

  • Lower local incomes

    The lowest wages of the five regions, so resident buyers have less to spend than in Madrid or Barcelona. Price the project with that in mind.

Side by side

Five markets, the same measures

Each row uses one source and one method across all five, so the rows can be compared. Where no comparable figure exists, the cell stays empty.

MeasureTenerifeCosta del SolValenciaMadridBarcelona
Entry price and momentum
Registered new-build price, €/m²Registradores, 12 months to Q2 20262.6383.4952.0073.9113.348
Appraised price, €/m²Tinsa, Q3 20262.1142.7841.9703.6932.918
New-build price change over the yearRegistradores, Q2 2026+12,4%+10,5%+15,6%+4,8%+6,3%
Price change over the year, all homesTinsa, Q3 2026+9,9%+14,0%+23,8%+13,1%+12,4%
Price change in the latest quarter, all homesTinsa, Q3 2026−0,7%+3,0%+6,1%+0,9%+1,4%
Demand
Tourists in January per tourist in AugustINE Frontur 2025, by region1,100,400,391,020,49
Hotel occupancy in JanuaryINE 2025, by province75,1%41,8%43,3%50,6%47,8%
Average January temperature, °CAEMET 1981–201018,412,111,86,39,2
Share of purchases by foreign buyersRegistradores, 2025 (partly via press)30,0%32,8%12,2%6,9%14,2%
New supply
Building permits per 1.000 homes, 12 months (fewer means less new supply coming)Tinsa, Q3 20263,78,54,95,44,2
Rental
Gross rental yieldOur calculation: idealista asking rent ÷ asking resale price, Oct 20265,2%5,2%—5,1%5,9%
Asking rent, €/m² a monthidealista, Oct 202615,318,8—21,617,4
Prime yield on rental blocksCushman & Wakefield, Q2 2026———3,85%4,10%
Rent cap in forceLey 12/2023, applied by region, Sept 2026NoNoNoNoYes
Tax and rules
Tax on buying a new build, including stamp dutyRegional rates 2026about 8%11,2%11,4%10,75%11,5%
Transfer tax on a resale homeRegional rates 20266,5%7%9–11%6%10–13%
New holiday rentalsLocal rules, 2026Only where planning allowsCity moratoriumCappedRestricted in the centreLicences end around 2028
Who can afford it
Mortgage cost as a share of household incomeTinsa, Q3 202640,1%53,3%34,5%53,5%45,2%
Average gross monthly wage, €INE 2024, by region2.0522.1472.1812.7622.530
The last crash
Fall from the 2007/08 peak to the lowOur calculation from Tinsa, Q3 2026−36,0%−50,5%−50,0%−48,4%−52,3%
Today against the 2007/08 peakTinsa, Q3 2026+25,5%+10,6%+7,7%+18,6%−8,1%
Market size
Home salesRegistradores, 202511.96336.11740.83981.48473.285
New-build salesRegistradores, 20253.30611.5485.97717.61013.820
A 100-home project as a share of those salesOur calculation3,0%0,9%1,7%0,6%0,7%
Airport passengers, millionsAena 2025; Tenerife has two airports21,126,811,968,257,5

Province-level figures: "Tenerife" is the province of Santa Cruz de Tenerife, which also includes La Palma, La Gomera and El Hierro, and "Costa del Sol" is the province of Málaga. The highlighted cell is the strongest on that row; rows without one are not simply better when higher. Not in the table: the ministry estimate of 18.788 unsold new homes in the province at the end of 2025. It appears to be worked out from completions and sales since 2005, it is not a count of homes on the market, it covers three other islands, and we could not verify it.

On the island

Where others build, where we look

Two national developers are building on the south-west coast. We look for land in the north.

  • Metrovacesa: Abora, Adeje

    138 homes in Adeje. Construction began in January 2026, according to the company.

  • Aedas: Solum, Guía de Isora

    160 homes, 85% sold when the first phase was handed over in June 2026, according to the company.

  • Where we look: the north

    Homes from €400.000 to €700.000 for international buyers, away from the crowded luxury segment in the south.

AnagaSanta CruzEl RosarioCandelaria & ArafoGüímarArico & FasniaGranadillaSan Miguel & VilaflorAronaAdejeGuía de IsoraSantiago del TeideBuenavista & TenoGarachico & Los SilosIcod de los VinosLos RealejosPuerto de la CruzLa OrotavaSanta Úrsula & AcentejoTacoronte & El SauzalLa LagunaTenerife North airportTenerife South airportAdejeGuía de IsoraOur focus

Tenerife North airport · Tenerife South airport

Schematic map. Figures as reported by the companies.
A large residential development of stepped apartment buildings on the coast of Tenerife, with La Gomera on the horizon
A multi-unit project of this kind. Illustration, not an existing project.

Against the others

Market by market

What Tenerife offers against each, and when the other one is the better choice.

  • Costa del Sol

    Tenerife offers new builds about a quarter cheaper, a far more even year (75% hotel occupancy in January against 42%), lower tax and a lighter mortgage burden. The Costa del Sol has more buyers and more volume: choose it if sales volume comes first.

  • Valencia

    Valencia is rising fastest and is the most affordable: choose it if you are chasing momentum. Tenerife offers winter demand, a much smaller fall last time (−36% against −50%) and lower tax on new homes, without Valencia’s tightening rules in flood-risk areas.

  • Madrid

    Madrid is the deepest market and the home of institutional rental: choose it for scale and a liquid exit. Tenerife offers a similar gross yield, a smaller fall last time, and a market where a €20–30M project carries weight.

  • Barcelona

    Barcelona shows the highest yield on our calculation. But it is the only one of the five with a rent cap in force, holiday-rental licences are set to end around 2028, a 30% social-housing reserve applies, and purchase taxes are the highest. It is also still below its 2007 peak.

What to watch

The risks on Tenerife

Licence time per town, typical case

Our estimates, in months from filing to grant. Only La Laguna is based on measured cases. Garachico: outside the historic centre.
La Laguna4–8
Los Realejos6–12
Santa Úrsula, El Sauzal, Tegueste9–18
Icod de los Vinos, San Juan de la Rambla, Los Silos, La Guancha, Tacoronte, Puerto de la Cruz, La Victoria, La Matanza, La Orotava12–24
El Tanque12–30
Buenavista del Norte, Garachico18–30
0122436months
38%
of Canary GDP comes from tourism (Exceltur)
≈22 months
of water emergency on Tenerife, from May 2024 to the end of February 2026
≈100.000
vehicles a day on each of the two motorways
23.000
people at protests against mass tourism across the islands, May 2025, official count

  • Licence times

    They vary widely by town hall. Our own estimates, per town, run from months to several years. Buy land subject to the licence where you can.

  • Construction costs

    Materials arrive by ship and labour is scarce. No published island figure exists, so get prices from two builders before you trust any model, including ours.

  • Rules that change

    Holiday rental has already been tightened, and national rental decrees are awaiting a vote in parliament. Assume another change during a three- to five-year project.

  • Dependence on tourism

    Tourism makes up about 38% of Canary GDP (Exceltur). A downturn would hit jobs, rents and buyers at the same time.

  • Water, roads and public mood

    Tenerife was under a water emergency from May 2024 to the end of February 2026. Around 100.000 vehicles a day use each of the two motorways. Protests against mass tourism drew 23.000 people across the islands in May 2025, by the official count.

Our conclusion

A strong place for the right project

We believe Tenerife is a strong place for a project of the right size, on land with a clear planning route. We also earn money when projects happen here, so check our reasoning. This is how we would build in a margin of safety.

Talk to us about a project →

  • Stress the sales price

    The numbers still have to work with prices 20 to 36% lower. That last figure is what happened here after 2007.

  • Pre-sales before building

    Start construction only after an agreed share of the homes is reserved.

  • A product residents can buy too

    So you do not depend on one group of buyers.

  • Real quotes for land and building

    No published figures compare land and building costs by market, so this page makes no claim about margins. We work those out per plot, with a registered valuer, two builders and sold prices.

Stress test: 100 homes at €500.000

Sales income of an example project, not a forecast. Land, building, finance and fees must still fit inside the price level you stress to.
Today’s price€50M
20% lower€40M
36% lower, as after 2007€32M

Fall and recovery since the peak

Our calculation from Tinsa, Q3 2026, by province. The 2007/08 peak is set to 100.
Low after the crash Today 2007/08 peak
Tenerife64126
Madrid52119
Valencia50108
Costa del Sol50111
Barcelona4892

Sources

Compiled in November 2026. Past prices say nothing about future returns, and this page is not investment advice. Have your own advisers check what matters to your decision.