German buyers push up house prices in Playa de Santiago

An enclave that is no longer just a stopover

Playa de Santiago, in Alajeró, is attracting a growing number of foreign buyers who settle there permanently.

Prices moving further out of reach of local incomes

The average house price here is higher than in other towns in the south of the island.

The marina, an added draw

The marina and the hotel complexes reinforce the appeal for European buyers.

A pattern also seen in Valle Gran Rey

A similar pattern of home purchases by foreign residents is repeating itself there.

From stopover destination to permanent home

Until recently, Playa de Santiago was a short-stay sun-and-beach tourist enclave. A growing number of foreign buyers, mainly German, are now choosing to make it their main or long-term home. The townscape already reflects this shift, with visible renovations to former fishermen's cottages.

Local wages unable to compete with foreign buyers

The average wage in the south of the island, tied to hospitality, falls well short of the spending power of central European buyers. Much of the housing that comes onto the market ends up in foreign hands even when local buyers are interested. Asking prices are now set with the foreign buyer in mind.

The marina, a constant draw

The marina and the hotel complexes sustain a steady flow of visitors, quite a few of whom end up buying a home. This stability sets the enclave apart from other, more seasonally dependent destinations. Enquiries from German buyers remain fairly constant throughout the year.

Valle Gran Rey, the other magnet

The pattern repeats, with some nuances, in Valle Gran Rey, another southern town with a strong foreign resident population. The combination of climate, tranquillity and prices still lower than other tourist areas explains the shared appeal. Town councils in the south agree that the phenomenon has become firmly established in recent years.