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Spanish property values reach new high: First-quarter 2025 summary

4 min read

  1. Consumer confidence pushing prices up, says industry
  2. Where have home prices risen the most?

HOME prices in Spain hit yet another year-on-year high in the first three months of 2025, seeing the average residential property worth 12.2% more than in the same period in 2024, latest figures show.

The most recent data from the National Statistics Institute (INE)'s Housing Prices Index (IPV) reveal that pre-owned homes rose in market value by 12.3% on those recorded between January and March last year, whilst the cost of a new build went up by 12.1%.

Between the final quarter of 2024 and the first quarter of 2025, home values across the board went up by 3.5%, although new builds saw greater increases in these three months – at 5.5%, compared with 3.2% for pre-owned properties.

First-quarter growth in 2025 was up by 1.2% on that of 2024, a year that saw property prices rise by an average of 8.4%.

Timeshare apartments in Cabo Pino near Marbella, Andalucia, Spain.
Spanish home prices up by 12.2% in the first quarter of 2025 - another year-on-year high. Photo: Canva

Home values have been consistently rising by above the rate of inflation for the past 11 years, ending a long-running slump sparked by the recession that began in 2008.

In Spain, this recession – in addition to the factors that contributed to the global financial crisis – was triggered by an unsustainable property-price boom combined with tanking demand and excess supply. Home values soared to record levels in 2007, with year-on-year growth at 9.8% and market prices nearly doubling in three years – before plummeting almost overnight.

Although 2007 prices and price growth remain the most dramatic ever seen, post-pandemic figures have been edging closer to it with each passing year.

And every quarter has produced a fresh market value growth record.

Consumer confidence pushing prices up, says industry

Spiralling market values are largely due to a gulf between supply and demand, Eurozone interest rate cuts leaving mortgages more affordable, and greater flexibility among lenders, according to property professionals.

Foreign buyers continue to contribute towards price growth, but despite concerns that non-resident overseas investors are inflating marwket values, these only account for around 2.6% of sales.

Founder of the UNESCO Housing Cathedra Sergio Nasarre warns: “Spain has been making it harder for families to get on the housing ladder for the past 17 years, and now they're being pushed out by foreign investors.”

But estate agencies disagree. Their sales data show that young adults leaving home, and downsizing Spanish nationals who no longer need a mortgage, account for around 25% of buyers.

At least 20% of sales account for people who had been intending to buy for some years, but opted to shelve their plans due to rocketing Eurozone interest rates.

This sudden resurgence of buyer interest has led to a price hike, and the demand-supply chasm is huge.

At present, about 15% of Spain's population is seeking to purchase a home – up from 12% pre-pandemic – although for every eight people who want to buy, only one owner wants to sell, say industry sources.

Research indicates that Spain needs an additional 240,000 homes available every year – yet barely 100,000 new properties are built annually, and there are not enough pre-existing homes available to make up the difference.

Although hundreds of thousands of homes are on sale in Spain at any one time, the property market has been so busy in recent years that they are snapped up quickly, estate agencies report.

Where have home prices risen the most?

Major hikes have been seen in every single region with – unusually - little difference in price rises between them.

The southern region of Andalucía and one of Spain's offshore territories – Melilla, which borders Morocco – both saw the highest annual growth between the first quarters of 2024 and 2025 in percentage terms. Market values went up in these territories by 14%.

In Spain's other north African enclave, Ceuta, along with Murcia in the mainland south-east and the northern regions of La Rioja, Aragón and Asturias, property price rises were just over 13%.

Figures above 12% were recorded in the Canary Islands, Comunidad Valenciana, Basque Country, and the centre-northern region of Castilla y León.

Slightly below the national average increase were the high-demand hotspots of Catalunya and Madrid (11.7% and 11.6% respectively), only slightly ahead of the northern regions of Navarra and Galicia.

Not one region registered price rises of less than 10% - the figure for the Balearic Islands, which saw the most reduced growth in an already-spiralling market where affordable homes are in short supply.

Prices and availability vary vastly across the country, however. Most budgets are still catered for if you're open to discovering new locations. You can filter by lifestyle choice, home type and cost using our Find your place in Spain tool.

The information contained in this article is for general information and guidance only. Our articles aim to enrich your understanding of the Spanish property market, not to provide professional legal, tax or financial advice. For specialised guidance, it is wise to consult with professional advisers. While we strive for accuracy, thinkSPAIN cannot guarantee that the information we supply is either complete or fully up to date. Decisions based on our articles are made at your discretion. thinkSPAIN assumes no liability for any actions taken, errors or omissions.

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