Canary Islands Lead Housing Price Surge, Up 16.7% in the Past Year

The island territories, the Balearics and the Canaries, are driving the rise in Spain’s residential market, with a 16.7% year‑on‑year increase and a 1.1% monthly rise in September. Since the post‑crisis lows, the historic jump amounts to 77%.

The average price of new and second‑hand homes in the islands rose 16.7% year‑on‑year and 1.1% month‑on‑month in September, keeping the Balearic and Canary Islands at the top of the national price‑growth rankings.

• Prices remain 77.1% above the post‑financial‑crisis trough.
• They are also 20.3% higher than the nominal peaks reached in 2007, before the bubble burst.
• Adjusted for inflation, the real price level is still 14% below that historic high, contrary to common perception.

Housing Costs Represent About 35% of Disposable Income

Across Spain, the average home price grew 12.3% year‑on‑year in September and 1.1% compared with the previous month, according to the latest monthly report from the consultancy Tinsa (Tinsa IMIE), which monitors residential product values nationwide.

• Every region except interior municipalities posted annual gains above 10%.
• “Capitals and large cities” ranked second overall, with a 13.4% increase.

“In September, residential prices continued to rise faster than inflation, with widespread gains across the territory,” said Cristina Arias, Director of Tinsa’s Research Service.
“This progress is beginning to show up as a slight rise in the theoretical purchase‑effort rate, which stays around 35% of disposable income.”

The report attributes the persistent price climb to several factors:

• Resilient employment levels.
• Moderate mortgage costs.
• Household savings rates above the historical average, keeping demand strong.

Nevertheless, Tinsa warns that new‑home construction remains insufficient to ease price pressure, despite a rebound in building permits.

The study also notes that the national average home price is still 5.9% below the 2007 peak, while the islands far exceed that benchmark.

“Island territories and major capitals concentrate the greatest price tension due to limited supply and strong residential and tourist demand,” the analysis concludes.

Source: IMIE General – Tinsa, October 2025