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Canaries need more new homes to avoid major deficit 

The Canary Islands are heading for a deficit of 140,000 homes in 2031, experts claim.

The construction sector has begun a modest recovery in the Canaries after the crash that led to the economic crisis. However, although the data is better than five years ago, it is still far from those recorded pre-recession and even at the beginning of the 1990s of the past century.

The slow pace of cons-truction causes a shortage of supply and demand that currently amounts to 40,000 homes and that by 2031, if the execution is accelerated, it can reach 140,000. This gap is the main cause of the rising prices that the real estate market has experienced in recent years and which particularly affects rental.

The figures – and the conclusions drawn from them – are part of the study “Housing in the Canaries”, prepared by the consultora Corporación 5 and promoted by the DISA Foundation. The report puts at 1,100 the annual rate of construction of residential buildings, while noting that in order to achieve a balance between supply and demand in 2031 it should be 15,000. Correcting this gap in a shorter period – the year 2022 – would need about 22,000 homes each year.

The shortage of supply is, according to the report, the central reason for the increase in prices. This does not imply that there are no other factors – the vacation rental, among them – but the authors of the report understand that they would not have the same effect if the real estate park were to meet the needs of the population.

The report points to the difficulties related to the issueof licenses as the main factor that slows down the growth of housing construction.

Although the holiday rental affects the rise in housing prices, its influence would not be so if the supply of houses were adjusted to the demand, according to the study.