The Canary Islands’ regional government has tasked its Brussels office with investigating potential legal frameworks for restricting foreign property ownership in the archipelago.
The Canary Islands, a popular destination renowned for its year-round sunshine and unique landscapes, is grappling with a severe housing crisis. Rising demand and limited supply have pushed property prices to unsustainable levels, leaving many local residents struggling to afford homes. In response, the regional government is exploring the possibility of imposing restrictions on foreign property purchases as part of a broader strategy to address this pressing issue.
The Canary Islands’ housing crisis
The housing crisis in the Canary Islands has reached a critical point. The influx of non-resident foreign buyers is being cited as a major factor behind skyrocketing property prices. José Manuel Bermúdez, a prominent political figure in the CC party (part of the governing coalition), has highlighted the scale of the problem: “In areas such as the south of Fuerteventura, Lanzarote, Tenerife and Gran Canaria, one of every two properties sold is acquired by foreigners.”
This trend has put additional pressure on the local housing market, making it increasingly difficult for residents to secure affordable housing. The situation is further compounded by the islands’ geographical limitations, which naturally constrain the expansion of the housing supply.
Government action and legal considerations
In a bid to tackle the issue, the Canary Islands government has tasked its Brussels office with investigating potential legal frameworks for restricting foreign property ownership within the EU, announced Pablo Rodríguez, Minister of Public Works, Transport and Housing (CC Party member), last Tuesday. The focus is on leveraging provisions for outermost regions, such as those outlined in Article 349 of the Treaty on the Functioning of the European Union. This article provides scope for special measures to address the unique challenges faced by regions like the Canary Islands.
This initiative has some local political support, with José Manuel Bermúdez advocating for urgent action despite potential obstacles within the EU legal system. “The Canary Islands government must take measures to limit the purchase of homes by non-resident foreigners,” he stated, emphasising the importance of safeguarding local residents’ access to housing.
Balancing interests: a delicate task
While addressing the housing crisis is paramount, the Canary Islands’ government also acknowledges the region’s longstanding reputation as a welcoming destination for visitors and investors alike. Balancing the need to protect local housing access with the islands’ openness to international communities will be key to ensuring a sustainable and inclusive approach.
Pablo Rodríguez has echoed this sentiment, stating: “The purchase of properties by non-resident foreigners is increasing the price per square meter, which further aggravates the situation.” The government’s challenge lies in navigating these conflicting priorities while maintaining the region’s economic and cultural vibrancy.
Potential implications and next steps
If restrictions on foreign property purchases were to be implemented, the Canary Islands could face a range of implications:
- legal challenges: Any proposed measures must align with EU regulations, which could lead to complex legal disputes.
- economic impact: Limiting foreign investment might affect the islands’ property market and broader economy in unforeseen ways.
- social impact: The move could alter perceptions of the Canary Islands as a welcoming destination, potentially raising concerns about discrimination or exclusion.
To address these concerns, the regional government plans to conduct further research and consult widely with stakeholders, including EU institutions, legal experts, and local communities. The findings will inform the development of a concrete proposal that outlines the scope and mechanisms of any potential restrictions.
The Balearic Islands have already tried to go down this path with nothing to show for it.
