Top 5 Areas in Southern Tenerife to Buy Property in 2025

Southern Tenerife is the beating heart of the Canary Islands’ tourism industry and the main rental market for both short-term holiday lets and long-term rentals. With steady tourist growth, attractive property prices, and year-round demand, the region has become one of the most profitable real estate investment destinations in Spain.

In this guide, we will review the top 5 areas in South Tenerife that guarantee strong rental yields, high occupancy rates, and excellent lifestyle benefits.

1. Costa Adeje – The Premium Investment Hotspot

Costa Adeje is the most prestigious and in-demand area of Tenerife real estate. Famous for its luxury hotels, sandy beaches, shopping centers, and fine dining, it attracts both tourists and property buyers from across Europe.

• Property types: sea view apartments, luxury villas with pools, penthouses, and holiday homes.

• Investment potential: High rental demand year-round with gross yields of 7–9%.

• Target tenants: tourists seeking premium holiday rentals, digital nomads, and expats relocating to the island.

👉 Costa Adeje is ideal for those looking to buy a profitable holiday rental property or a luxury villa for both living and income.

2. El Duque – Exclusive Lifestyle & Secure Investments

El Duque is considered one of the most elite neighborhoods in Tenerife, known for its high-end residences, five-star hotels, and exclusive shopping centers.

• Property types: modern villas, designer apartments, gated community houses.

• Investment appeal: stable property prices with strong appreciation potential.

• Lifestyle factor: top-class infrastructure, international schools, private clinics, and 24/7 security.

👉 Investors who choose El Duque focus on long-term capital growth while maintaining excellent rental income from affluent clients.

3. La Caleta – Boutique Seaside Living

La Caleta is a stylish and quiet fishing village that has transformed into a boutique property hotspot. Known for its gourmet restaurants and relaxed atmosphere, it offers a more authentic Canarian lifestyle.

• Property types: villas with ocean views, modern apartments, luxury townhouses.

• Rental demand: strong among international tourists and retirees seeking long-term stays.

• Unique feature: rare availability of seafront villas in Tenerife, making it a high-value investment.

👉 La Caleta is perfect for buyers looking for exclusive holiday homes or luxury rental properties.

4. Los Cristianos – The All-Year Rental Market

Los Cristianos is one of the most popular resorts in South Tenerife. With its port, beaches, and lively atmosphere, it appeals to both tourists and locals.

• Property types: budget apartments, holiday studios, resale apartments, and mid-range villas.

• Rental potential: one of the strongest in Tenerife, with high occupancy rates year-round.

• Market trend: balanced mix of affordable and mid-luxury real estate, ideal for investors targeting buy-to-let apartments.

👉 If you want guaranteed rental income in Tenerife, Los Cristianos offers one of the most stable markets.

5. Palm-Mar – Fast-Growing Residential Area

Palm-Mar is a modern residential district that is rapidly gaining popularity. Located close to Los Cristianos, it combines peace, comfort, and quick access to beaches and infrastructure.

• Property types: new-build apartments, penthouses, modern villas.

• Market appeal: affordable entry prices with excellent long-term growth potential.

• Target audience: families, remote workers, and retirees looking for a calm neighborhood.

Palm-Mar is a strong choice for those seeking affordable property in Tenerife with good appreciation prospects.

Key Investment Considerations

When choosing a neighborhood in Tenerife, investors should consider:

• VV licenses (holiday rental permits).

• Infrastructure (schools, healthcare, shopping).

• Transport accessibility (airports, highways, public transport).

• Rental strategy (short-term holiday lets vs. long-term rentals).

Bottom Line: Where to Buy Property in South Tenerife

Each area in Southern Tenerife offers unique benefits:

• Costa Adeje → luxury & high rental yields.

• El Duque → exclusivity & long-term capital growth.

• La Caleta → boutique seafront living.

• Los Cristianos → stable rental market & strong demand.

• Palm-Mar → affordable entry point with growth potential.

Whether you are looking for apartments, villas, or commercial property in Tenerife, South Tenerife remains the best region to secure both rental income and capital appreciation in 2025.

Contact House Tenerife Agency today to find the most profitable property tailored to your investment goals.