Spanish cities 'most popular' for 2025 property investment

SPAIN'S largest two cities dominate the top 10 most desirable in Europe for investing in property in 2025, according to new research by CBRE Consultants.

Madrid comes second, rising from third in 2024, and Barcelona is in fourth place, up from seventh last year.

And Spain is the only country featured with two locations among the most favoured for property investors.

London remains in the top spot, although if initial outlay is a consideration, Spain is likely to nudge ahead due to homes in the British capital being among the most expensive in the world.

France is sandwiched between Madrid and Barcelona, with Paris coming third, and Spain's biggest metropolitan zones have beaten – in descending order – Warsaw (Poland), Amsterdam (The Netherlands), Berlin (Germany), Lisbon (Portugal), Copenhagen (Denmark), and Milan (Italy).

Soaring interest in Spain as a property investment hub is not new. According to CBRE's figures, the country as a whole – now second from top – appeared fourth last year, seventh in 2022 and did not even enter the 10 favourites in 2021.

Economic upturn increases investor confidence in Spain

CBRE interviewed around 800 European-based property investors in November 2024, and those who favoured Spain highlighted the national economy's satisfactory progress, boosted by tourism, population growth and a rising gross domestic product (GDP).

Expansion in the hotel and tourist rental industries, offering high returns to international buyers, has contributed to investor confidence in Spain for this year.

Also, market conditions in Spain are becoming more favourable, in buyers' opinions: Property price stability and falling Eurozone interest rates make the country an attractive prospect, together with the general recovery seen recently in its estate agency market, and a consolidation of credit terms offering investors a better deal.

Independently of their preferred location for property purchase, investors' main concerns for the coming year included the gulf between buyer and seller expectations – cited by half of respondents – and uncertainty in international politics, mentioned by four in 10.

Despite these caveats, investment in bricks and mortar shows no signs of slowing down, CBRE reveals. Of those surveyed, 92% intend to grow their portfolios in 2025, with 70% confident that Europe's estate agency industry would be stronger by the end of the year.

Spending on property for investment reached €14 billion (€14,000,000,000) across Europe in 2024, and is expected to rise by around 15% this year, to a total of €16bn.

What makes Madrid and Barcelona attractive to investors?

Types of property in Spain chosen for investment by international buyers, the study reveals, are mainly residential homes (32%). But these are closely followed by warehouses (27%), whilst offices (16%), retail premises (10%) and hotels (9%) are also among the most popular.

Spain's largest cities are sought-after investing locations for very different reasons and property types, CBRE's research found.

Madrid is seen as financially stable, with a growing corporate landscape and numerous 'gentrification' or urban regeneration projects currently in progress; Barcelona's property investor market is benefiting from a continually-strengthening tourism industry and ever-increasing demand for hotel rooms and residential homes.

The rapid rise in e-commerce nationally has awakened interest in investment in storage, fulfilment and delivery hubs. While Spain still lags behind much of northern Europe for ordering goods online, the concept is catching on and looks set to show speedy growth in the short to medium term.

But thethriving face-to-face high-street shopping culture in Spain shows no indication of being under threat. To this end, investment in retail premises is still seen as a viable option among those surveyed.

Commercial property or residential, whether for investment or personal use, is in plentiful supply in Spain with options covering almost any budget and practically every location. Have a look at what's on the market right now in our Property for sale section.