Spain’s 2025 Property Market Forecast – Will Prices Keep Rising?
1. Overview After 2024
Spain enters 2025 with a strong and resilient property market.
Despite slower global growth and higher interest rates, demand for coastal real estate remains high, particularly in the Costa del Sol, Costa Blanca, and Balearic Islands.
Foreign buyers – mainly from the UK, Germany, Scandinavia, and increasingly Central Europe – continue to drive the market.
2. Key Factors Influencing the Market
- Interest Rates: Stabilizing under ECB policy, keeping mortgages accessible.
- Construction Costs: Still 20–25% above pre-pandemic levels despite slight declines.
- Preference for New Builds: Energy-efficient developments (A+) are outperforming older stock.
- Limited Supply: Lengthy permitting procedures slow down new construction, especially in Andalusia.
3. Regional Outlook
- Costa del Sol: Prices expected to rise by 4–6%. Marbella, Estepona, and Benahavís remain premium markets.
- Costa Blanca: Growth of 3–5% driven by Northern European buyers.
- Mallorca & Ibiza: Prices at record highs, though stabilization is underway.
- Madrid & Barcelona: Minor corrections (-1–2%) due to increased supply and rental restrictions.
4. Investor Behaviour
Investors are focusing on energy-efficient, easily rentable properties.
Corporate purchases (via S.L. companies) are growing due to tax advantages.
Fractional ownership and property investment clubs are also gaining traction among mid-size investors.
5. Outlook for 2026
Spain’s property market will likely maintain steady growth, supported by tourism, digital migration, and international capital inflows.
Price growth will moderate but remain positive, with sustainability and location as the main differentiators.
Spain remains one of Europe’s most attractive and stable property markets for 2025.
Investors can expect balanced growth, strong rental demand, and solid long-term returns.
