Over 1 million tourists visited Lanzarote from Britain and Ireland alone during 2006.  Add lower mortgage rates, stir in annual capital growth rates of 9% and you have the perfect recipe for profit.

And whilst there’s no doubting the fact that Playa Blanca is currently grabbing the attention as the top Lanzarote property hot spot, investors are also being urged by locally based experts to take a closer look at other resorts on the island.

Playa Blanca has been bolstered over the last few years by the construction of good quality new hotels and reasonably priced new developments, which have boosted visitor numbers to the resort and have proved something of a magnet for property investors.

But whilst Playa Blanca is on an upward swing other parts of the island are now poised for fresh development.  Offering opportunities for investors in both the residential and commercial sectors.

Regarded as the most up-market resort on the island, it boasted new hotels and apartment complexes that attracted moneyed German visitors, as well as the British, in droves.

Much of this initial development of the resort was made under the aegis of Cesar Manrique, the island artist and architect who oversaw the relatively constrained 
evolution of tourism on Lanzarote.

Manrique created a stylish coastal resort around the main cornerstones of the 5 Star Gran Melia Salinas Hotel - with it´s incredible interior gardens - and the Pueblo Marinero – now the venue for Costa Teguise´s weekly market every Friday evening.

For a period Manrique´s plan paid off - but then the downturn in the German economy in the 1990´s and the introduction of all inclusive packages within many of the resorts hotels, plus the introduction of more exotic holiday destinations, all took their toll. 

There have been no new hotel or holiday apartment developments in Costa Teguise for many years.  And residential development has been low key by comparison with the rest of the island too – focusing almost exclusively on the construction of family homes such as duplexes. 

Costa Teguise also suffers from a man-made malady akin to the dilemma facing the Tin Man in the Wizard of Oz – it lacks a heart.  So now, local authorities have floated the idea of renaming it the Costa d’Amore in the hope of encouraging honeymooners and couples to holiday there.

Regardless of how successful that strategy proves to be there is no doubt that the town is in need of rejuvenation.  And interestingly it looks like this renaissance could be fuelled by growing demand for residential property. As opposed to a resurgence in tourism.

According to Gaby Critchley of Lanzarote estate agents “Costa Teguise is basically starting to evolve into a suburb of the capital Arrecife.  Property prices here have shown good growth over the last five years, in line with the rest of the island.  And demand remains strong.  But increasingly this is coming from local Spanish buyers. Not people looking for a holiday home.”

A quick tour of the resort is revealing – and certainly seems to support this theory.  As once popular holiday complexes, such as Playa Rocas and Las Coronas are now shedding their former skins and being sold off as residential units.

Elsewhere in the resort, new builds offering reasonably priced residential units, such as El Palmeral, have sold quickly too.
 

Algol´s Teguise Greens development offers a mixture of terraced duplexes and semi-detached villas and will essentially extend Costa Teguise up the hill towards the golf course, making it virtually inseparable from Tahiche – already regarded, incidentally, as a popular outer suburb of Arrecife. 

A further major Algol development is also planned elsewhere within Costa Teguise.  But where will the demand come from?

Gaby Critchley from Location Estate Agents thinks she knows: “The bulk of demand for these new build properties is going to come from local Spanish buyers – often professionals - many of whom are already working in Arrecife”.

“Costa Teguise is just five minutes drive from the islands capital.  Local transport links are good too.  And Arrecife remains the main business hub of the island.

“Costa Teguise also retains all of the basic attributes that made it a booming tourist development in the first place, i.e. great beaches, relaxed feel, proximity to all of the islands main cultural attractions and it still boasts the only golf course on the island”.

“Combined with a choice of good schools covering all educational levels in close proximity it offers a very attractive lifestyle option for anyone who works in Arrecife. Or indeed elsewhere on the island.”

On closer inspection, the renewed development of Costa Teguise appears to be part of a broader overall strategy on the behalf of the Ayuntamiento.  As the basic infrastructure of roads and streets for these new units has been in place for many years.

This staged development – allowing construction to continue apace in one area whilst restricting it in others - certainly ensures against a whole glut of new build properties in every resort ending up on the market all at the same time.

More cynically perhaps, this could also be perceived as a way of ensuring that development on the island appears to be relatively restrained.  Unfettered and simultaneous construction in a number of resorts at once would, no doubt, attract a great deal of criticism on environmental grounds and possibly even impact negatively on tourism.  A charge that the island government is loathe to have levied against them given their vocal commitment to controlled development.

Either way, there can be no doubting that Costa Teguise is on the verge of a new boom.  Creating opportunities for many different types of property investment. And possibly even establishing it as Lanzarote´s newest property hot spot.