Housing in the Canary Islands rises 17.8% year‑on‑year in Q1

The war in Iran could lift inflation and housing investment, as property is seen as a safe‑haven asset, pushing prices higher.

Spain’s overall housing price rose 14.3% in the first quarter compared with the same period last year, a real increase of 11.8% after stripping out inflation, reaching €1,987 per square metre (Tinsa by Accumin).

In the Canary Islands, prices jumped 17.8% YoY, placing the archipelago among the 14 autonomous communities with nominal annual gains above 10%. At the provincial level, price hikes intensified in 40 of Spain’s 52 provinces.

Where the Sharpest Increases Occurred

• Toledo: +23.2%
• Albacete: +19.6%
• Madrid: +19.2%
• Santa Cruz de Tenerife: +19.0% (Las Palmas de Gran Canaria: +14.6%)
• Alicante: +18.3%
• Castellón: +18.0%

Zamora was the only province where housing became cheaper, falling 3.8% YoY.

Since the post‑crisis low of summer 2015, new and used homes in Spain have risen 68% nominally, still 4.5% below the 2007 peak. In real terms, values are 32% higher than the 2015 trough but remain 34% under the 2007 maximum. The most pronounced gains are concentrated along the northern coast, in Madrid, interior provincial capitals, and the Mediterranean shoreline.

Compared with the last quarter of the previous year, the January‑March period recorded a 3.2% quarterly increase. The YoY rise is 0.3 percentage points higher than in Q4 2025 and has been climbing steadily since Q4 2024, when the annual growth stood at 4.2%.

“At the beginning of 2026, the impact of the previous rate cuts, which was still very present in January 2025, has already been absorbed by the market and a trend towards stabilization of transactions seems reasonable,” said Cristina Arias, director of the Tinsa by Accumin Study Service.

Uncertainty Ahead of the Iran Conflict

The report warns that the ongoing Middle‑East conflict could affect inflation and reference interest rates, thereby influencing residential demand. Buyers will face contrasting pressures:

• Negative side: economic uncertainty, reduced purchasing power, higher mortgage costs.
• Positive side: increased interest in property as a hedge against inflation.

“Geopolitical instability could fuel a new rise in new‑build housing prices and accentuate the difficulties of accessing housing for the general population,” Arias added.

14 Autonomous Communities Recorded Gains Over 10%

The regions with the strongest nominal YoY price growth are:

• Community of Madrid: +19.2%
• Valencian Community: +19.1%
• Castilla‑La Mancha: +18.8%
• Canary Islands: +17.8%
• Cantabria: +16.2%
• Region of Murcia: +16.0%
• Balearic Islands: +15.5%

Conversely, Extremadura, Ceuta, La Rioja, and Melilla posted gains below 8% YoY. Quarterly growth exceeding 4% was observed in Castilla‑La Mancha, the Canary Islands, Castilla y León, Murcia, and the Valencian Community.

In nominal terms, the Balearic Islands, Madrid, Melilla, and for the first time this quarter, the Canary Islands have surpassed the price peaks reached during the 2007 bubble. Adjusted for inflation, only the Balearic Islands are close, sitting 0.1% below that historic high.

Provincially, 34 provinces posted YoY increases above 10%, with the steepest rises clustered around Madrid and its neighboring provinces, the islands, the Mediterranean coast, and the Cantabrian fringe.

Affordability Index Near 34%

Despite the price surge, housing affordability remains moderately reasonable. The national average effort rate—the share of disposable income needed to service a mortgage—stood at 33.9%, up slightly from 33.3% in the previous quarter.

Eight provinces still exceed the 35% threshold considered acceptable:

• Balearic Islands
• Málaga
• Madrid
• Barcelona
• Alicante
• Vizcaya
• Santa Cruz de Tenerife
• Cádiz

The most strained market is the Balearic Islands, where locals face an effort rate of 54%. Málaga and Madrid follow with 49%.