ANALYSIS OF THE SPANISH REAL ESTATE MARKET IN 2025

LIGHTS & SHADOWS

CONTENTS

1. Housing Transactions
2. Price Trends & Regional Highlights
3. Mortgages & Lending Conditions
4. Rental Market & Yield Trends
5. Segment Breakdown (New, Resale, Luxury, Coastal)
6. Outlook for Late 2025 / 2026
7.  Conclusions

HOUSING TRANSACTIONS

In July 2025, Spain recorded 64,730 home transactions, a 13.6% increase compared to July 2024.

• Up through July, cumulative home sales reached 422,263 units, boosted by both new-build and resale properties.
• According to industry research, home sales grew by 11.7% in 2024, and early 2025 trends indicate sustained momentum.
• Market forecasts suggest around 680,000 property sales across 2025.

Takeaway: The transaction volume is recovering strongly. Buyer confidence is back.

PRICE TRENDS & REGIONAL HIGHLIGHTS

• In Q1 2025, average property prices rose 11.16% year-on-year to around €2,311 per square meter.
• The national housing index reached €2,033 per square meter, up from €1,972 in Q4 2024.
• Forecasts suggest around 5.3% price growth in 2025, with some estimates reaching up to 9% by 2026.
• Coastal and island markets are outperforming:
• Mediterranean coast: +8.9% in Q1 2025 vs. 2024
• Islands (Balearics & Canaries): +12.8% in Q1 2025 vs. 2024
• Atlantic and northern coasts: growth between 5% and 6%

Regional leaders in price growth include Andalucía, Aragón, Navarra, and Valencia, while rural regions lag behind.

MORTGAGES & LENDING CONDITIONS

• Mortgage approvals and new applications are decelerating, reflecting tighter lending conditions.
• Average mortgage rate in mid-2025 was around 2.9%, with approximately 45,000 new mortgages signed in July.
• Affordability remains a challenge in major cities, though still manageable in many regions.

RENTAL MARKET & YIELD TRENDS

• Rental prices are climbing, especially in high-demand cities such as Madrid and Barcelona, as well as coastal areas.
• Rental growth for 2025 is expected to exceed 10% in some regions.
• Long-term rental demand is rising due to affordability challenges for buyers.
• Yields remain attractive compared to other European countries, sustaining investor interest.

SEGMENT BREAKDOWN

New Builds: Facing higher costs and supply delays, but still attractive in prime locations.

Resale Housing: More stable and liquid, with stronger buyer demand for quick occupancy.

Luxury Housing: Strong demand from both domestic and international buyers, particularly in prime coastal areas.

Coastal and Island Markets: Outperforming inland regions, driven by foreign buyers and lifestyle demand.

OUTLOOK FOR LATE 2025 / 2026

• National property price growth is projected between 4% and 6% for 2025, with cumulative growth of around 9% by 2026.
• Supply remains limited, especially in new builds, which may push demand higher.
• Key risks: inflation, interest rate changes, construction labor shortages, and regulatory reforms.
• Market trends such as sustainability, smart homes, and ESG-focused developments are gaining importance.

CONCLUSIONS

• The Spanish real estate market in 2025 is showing one of its strongest performances in over a decade.
• Segmentation is key: coastal, luxury, and prime markets are leading growth, while interior and rural regions lag.
• Investors and buyers should remain cautious of potential overheating and focus on location, quality, and long-term value.