Spain’s Real Estate Market in 2025: Between Overheating and Tightening Regulation

Housing sales in Spain continue to rise alongside prices. Demand remains strong, but supply is still constrained. Affordability issues remain unresolved, prompting mass protests and strict government measures—many of which are directed at foreign investors.

According to Global Property Guide, the average price per square meter in early 2025 reached €2,311, an 11.16% increase from the same period in 2024 (or 8.71% adjusted for inflation). Demand remains high: in January 2025, the number of transactions rose by 11% YoY, totaling 60,650 deals. New-build sales surged by 30.9% annually.

Q1 2025: A Record Quarter

The first quarter saw 181,625 transactions—a record since 2007 and a 19.9% increase over Q1 2024. Over 12 months ending March 2025, 667,058 properties were sold (+16.3%), including 524,564 second-hand homes (+13%) and 142,494 new builds (+30.6%).

Spanish Property Insight also reports rising prices. In Q1 2025, the average price per square meter stood at €2,226, up 2.9% since the end of 2024. New homes climbed 5.5% to €2,467/m²; resales rose 1.9% to €2,153/m². The resale index is now 18.8% above the 2007 peak.
Most expensive regions:

Madrid: €3,955

Balearic Islands: €3,822

Basque Country: €3,193

Canary Islands: €2,625

Murcia Leads the Market

Murcia recorded the highest sales growth among Spanish regions: +20.6% QoQ, with 7,312 deals, including 1,725 new-builds (+55.5%). Foreign buyers account for 20.4% of local demand, ranking fourth nationwide after the Balearics (30%), Valencia (28.3%), and the Canaries (24.6%).

New Build Market: Strong Growth but Still a Shortage

Tinsa reports a 7.6% increase in new-build prices in 2024, to €2,528/m². The price gap between new and existing homes reached 44%, the highest on record. Compared to the 2007 nominal peak, prices have risen 66%, though real prices (adjusted for inflation) are still 21% below that peak.

According to Eurostat, Spain had the second-highest housing price growth in the Eurozone in 2024: +11.4%, behind only Portugal. The EU average was 4.9%.

Estimated Deficit: 600,000 Homes

The Bank of Spain estimates a 600,000-unit housing shortfall. Spain builds only about 90,000 new units annually, while household formation grows by around 275,000 per year. A government program aims to build 43,000 prefab homes by 2026, but private developers remain reluctant to participate.

Investor Pressure and Policy Response

High demand from wealthy Spaniards and foreign investors inflates prices. Developers and funds dominate supply. In April 2025, Spain ended the Golden Visa program. In May, a bill was introduced proposing a 100% property tax for non-EU buyers.

Outlook for 2025

Fitch: prices will rise 6–8%

CaixaBank: mortgage rates to fall to 3.25%; household incomes to rise 4%

Demographic growth will sustain demand
However, tighter rental and sales rules may reduce investor appeal.