The supply of homes for sale across the Canary Islands has dropped by around 13% in only a year, property portal Idealista has revealed. Capital cities in the archipelago, including Las Palmas in Gran Canaria and Santa Cruz in Tenerife, have witnessed even steeper declines, approaching 20%.

The platform has described the national decrease in housing stock in Spain as the most significant ever recorded. This drop has had a significant effect on the industry. Greg Rodríguez, director of Triumph Real Estate, said the sector is experiencing both a surge in demand and a shrinking supply, which has been exacerbated by limited new construction, increased foreign investment and a lack of public housing.

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Mr Rodríguez said: "In Gran Canaria, we’ve seen the number of available properties on Idealista drop from around 5,600–5,900 last year to just 4,200–4,500 today, that’s roughly a 15% decrease".

This trend, he added, occurred in both sales and rentals. 

Mr Rodríguez attributed the situation to several factors. One of the most significant is the imbalance between supply and increasing demand, particularly from foreign buyers, which has led to sharp increases in prices. The popularity of short-term holiday lets has also exacerbated the crisis.

“More property owners are opting for holiday lets, which further reduces the stock of homes available for local buyers,” said Rodríguez.

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A lack of social and affordable housing and a severe reduction in new construction have also contributed, the latter of which has become the victim of rising building material costs. 

"Construction used to cost around €700–800 per square metre. Now it's closer to €1,000–1,200," explained Rodríguez, which has squeezed out small developers and forced larger firms to scale back projects.

The Triumph Real Estate director does not forecast much improvement in the short term, with many of the factors driving the crisis showing few signs of easing. He believes real solutions lie in boosting new home construction, especially protected and public housing, as well as an urgent need to review the regulation of holiday lets and foreign property ownership, "if we really want to see a meaningful impact on the market".