Foreign buyers drive up house prices in Puerto Rico and Puerto de Mogán

The Puerto Rico ravine and the area around Puerto de Mogán, in the municipality of Mogán, have in recent years become the destination of choice for buyers from the United Kingdom, Germany and the Nordic countries seeking a second home or a holiday-rental investment. According to property portals, in some buildings in the area more than half of the sales completed over the past year have gone to foreign residents.

Prices double the island average

According to local property sources, the average price per square metre in the seafront developments of Puerto Rico is now running at figures double the island average, with one-bedroom flats overlooking the marina easily fetching more than 250,000 euros. Agents consulted say cash purchases remain the norm among these buyers, pricing out much of the local demand, which depends on mortgage financing.

The appeal of the climate and tourist rental returns

The combination of a stable year-round climate and high tourist occupancy explains, according to the sector, why many of these properties are already bought with the intention of letting them out as holiday accommodation for the rest of the year. That dual role as both a home and an investment asset has boosted interest in second- and third-floor flats with terraces, the most sought-after by middle-aged buyers planning to spend long stretches of the year on the island.

The impact on housing supply for Mogán residents

The Mogán town council has acknowledged in recent months that pressure from foreign buyers is making it harder for the municipality's own workers to access housing, with many ending up living in inland villages or neighbouring municipalities because they cannot afford prices on the coastal strip. Residents' groups are calling for more subsidised housing to be built further from the coast to offset this displacement.

A pattern repeated along the whole south-west coast

The phenomenon is not confined to Puerto Rico: estate agencies with offices in Arguineguín and Playa de Mogán confirm a similar dynamic, with buyers drawn by direct flights from northern Europe who, increasingly often, decide to move their tax residence to the island after several years as holiday-home owners.