Spanish property investors see strong 2025 mid-year returns

BUYING property in Spain has proven to be a solid investment so far this year, with the average owner now around 4% better off than they were at the beginning of January.

Residential and commercial buildings alike rose in value in the first six months of 2025, especially in major cities and coastal holiday hotspots.

In their latest Mid-Year Valuations report, international property investment managers CBRE say the pattern is likely to continue 'in the next few months', largely due to a 'marked shortage of land' and 'rising prices of new builds'.

“The first half of 2025 has been positive for the Spanish property market, in line with changing trends that began in 2024,” CBRE Valuation & Advisory Services (VAS) confirms.

“Asset values have increased in the majority of sectors analysed – high-street retail, private rental sector, residential building land, student residences, and hotels.

“Despite the current worldwide scenario being so uncertain and volatile, we are seeing considerable interest from investors.”

VAS chairman Fernando Fuente says clients frequently comment on the present 'lack of supply' and 'shortage of investment opportunities', which are 'pushing up prices'.

Commercial property leads value increases

This situation is most pronounced in the commercial property market, according to CBRE's research. Retail premises have risen in value by an average of 4.6% nationwide, ranging from 4.5% in Barcelona to 4.7% in Madrid – compared with a typical 1.7% increase during the same six months of 2024.

Demand is constantly growing in major metropolitan zones, largely among high-end brand names seeking to open shops in 'privileged areas', CBRE reports. In contrast to the wide-scale retail crisis ravaging other industrialised countries at present, the high street remains very buoyant and culturally relevant in Spain, making it an attractive alternative for investors in shop premises.

Storage warehouses and delivery hubs are now worth an average of 2.31% more than six months ago, rising to between 4% and 6% in key locations such as Madrid, Zaragoza, and along the Mediterranean seaboard.

Hotel buildings in key holiday hotspots have increased in value by 3% - marginally ahead of city hotels, at 2.5% - during the first half of 2025, having been 'performing well since the pandemic' thanks to the tourism industry's 'good, sound base' and 'growth in operating results', CBRE reveals.

Student rentals rose in value by 3.1%, and elderly care homes by 0.9%, between January and June inclusive – a consequence of 'well-established demand and limited supply'.

Office buildings have been the least-viable investment so far this year, except in premium metropolitan hubs. Their value has been steadily declining – albeit less so than in recent years – with sale prices shrinking by 2.57%, but CBRE reveals that those in key business districts in Madrid and Barcelona went up by 1.77% in the first half of 2025.

'Sustained growth' in property assets since 2023

Following a downturn in 2022 - triggered by global upheaval, a transport and fuel crisis, and soaring interest rates off the back of sharp inflation – nearly all types of Spanish property assets have experienced significant growth.

Taking the start of 2023 as a baseline, CBRE says hotel premises and student rentals have even outperformed mainstream residential property, increasing by over 9% and 7.8% respectively during that time.

But homeowners are also substantially more asset-rich, the report reveals. On average, their properties have risen in value by between 3% and 5% so far in 2025 and in region of 7% since 2023, depending upon location.

The value of residential building plots in Madrid and on the Costa del Sol increased by 4% in the first six months of this year, ahead of the Mediterranean and northern coastal strips (3%), and Barcelona (2%), having shown dramatic rises after the slump of late 2022, CBRE reports.

Since then, plots in the capital have gone up by 9% and, on the coasts, by 11% on average – or up to 17% in sought-after parts of the Costa del Sol, largely through foreign buyers intending to build themselves a luxury home.

The private rental sector (PRS) or 'build-to-rent' has shown particularly sound returns on investment so far this year, with the average for Madrid being 4.38% in the first quarter of 2025, or 7.3% since the start of 2023.

CBRE concludes that the property value increases seen in the past two-and-a-half years is not just a recovery from a market slowdown, but a new era of sustained growth as investors continue to view Spain as a safe, legally-secure and profitable choice.

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