Thorough research need for investment in falling property markets

Property prices in Tenerife are falling but watching the pricing trends could lead to some good investments, it is being claimed.

The latest edition of The Tenerife Property Price Guide shows falls in four areas of this popular island off the West coast of Africa. There are downturns in the South, South-East, the North and the Metropolitan region.

During the last six months, property prices have fallen by 3,48% in the South and South East (from Candelaria around the coast to Santiago del Teide). In the North, prices have fallen the least, by 2,64%, and in the Metropolitan region (Santa Cruz, La Laguna, El Rosario and Tegueste) prices have fallen by 3,27%. When general inflation is taken into account (2,1% over the last six months) the real falls are 5.6% in the South, 4,7% in the North and 5,4% in the Metropolitan region.

The figures are averages for these regions, and are based upon a survey of 6250 properties for sale. A few areas are level with inflation or still seeing prices rise. Puerto de la Cruz has seen falls below the average for example, while the falls in Adeje are consistent with the southern region as a whole.

But this shouldn't put investors off. 'The answer for people looking to buy in Tenerife is thorough research and knowing the pricing trends in the areas and for the property types. There is no substitute if you want to buy well and protect your investment. For those thinking of selling they can work out what would be a good or competitive price to ensure that they attract serious buyers,' said John Gardner of Value It, the Santa Ursula based publisher of the guide.

But the enduring popularity of the Canary Islands as a tourist destination means they are still an attractive proposition for property investors. 'Tenerife's popularity [with visitors] over the year, and the economy's reliance on its tourism sector, means the infrastructure is well developed and a wide range of activities are on offer,' said Liam Bailey, head of international research at David Stanley Redfern.

Mr Bailey added that the Canary Islands are engaged in a joint effort to do everything they can to maintain the high levels of tourism they attract.