In 26 of the 30 most populated areas of the Canary Islands, residents must earn at least eight years’ worth of income to afford a home. As a result, local councils may soon limit the purchase of properties for non-residential use or impose restrictions on tourist rentals.
This shift follows criteria set out by the European Union (EU) on Wednesday as part of a new Affordable Housing Law. The law classifies regions as “tensioned zones” where average home prices exceed eight years’ worth of residents’ salaries. These areas must also show a rise in this price-to-income ratio over the past decade. If buying a home requires ten or more years of income, the latter condition does not apply.
An analysis by Canarias Ahora, drawing on data from the General Council of Notaries and the National Institute of Statistics, indicates that most major municipalities in the archipelago meet these criteria. Only Ingenio, Agüimes, Arrecife, and Arucas fall outside this classification.
Adeje, with house prices demanding 24.57 years of average salary, is the most pressure-laden area. Guía de Isora follows closely, requiring 24.32 years’ worth of income, while San Miguel de Abona, Mogán, and Tías require 18.02, 17.28, and 17.27 years, respectively.
The four cities with populations over 100,000—Las Palmas de Gran Canaria, Santa Cruz de Tenerife, La Laguna, and Telde—also fit the criteria. In Las Palmas, affordability equates to 10.75 years’ salary; in Santa Cruz, it’s 12.32 years; and in La Laguna and Telde, it’s 12.55 and 10.46 years respectively. Ingenio is excluded, as it requires only 7.29 years’ income, while Arucas, Agüimes, and Arrecife have seen their income rise faster than housing costs since 2015.
Further classification as a tensioned zone depends on proving that the situation is unlikely to improve over the following three years. Authorities must consider demographic growth, new building permits, rental housing shortages, and the balance between new household creation and housing construction. They must also assess the impact of holiday rentals and purchases by non-residents.
Should a municipality receive this classification, it could then regulate holiday homes, particularly those not serving as primary residences, and restrict purchases for non-residential purposes. These measures would apply to properties acquired post-legislation and could last up to five years, extendable after a review. Councils would also need to implement structural measures to boost affordable housing availability.
Brussels has flagged that from 2013 to 2024, average property prices in the EU surged by nearly 60%, while household incomes grew by only 40%. The housing crisis disproportionately impacts low- and middle-income families, young people, and essential workers, who struggle to live in the areas where they work.
The proposal highlights tourist destinations and islands as regions facing the greatest imbalances. It notes that land shortages hinder a swift housing response to rising demand, with holiday rentals significantly affecting local housing markets.
The EU’s proposal states, “The Union faces a housing affordability crisis that undermines social cohesion and threatens overall competitiveness… Essential and seasonal workers can no longer afford to live in the communities they serve.”
It warns that residential properties are increasingly used for purposes other than permanent living, such as tourist accommodation and investment. Brussels aims to establish a common framework to enhance the availability and affordability of housing across the continent.
