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Property prices in the Basque Country are experiencing significant upward momentum in 2025, driven by limited supply, strong demand, and favorable economic conditions. The average residential property price has reached €3,009-€3,423 per square meter as of mid-2025, with year-on-year growth rates of 5.4% to 8.9% across the region.
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The Basque Country property market is experiencing robust growth with prices rising across all provinces in 2025.
New construction is driving the highest price increases, while foreign investment and tourism continue to fuel demand in coastal cities like San Sebastián.
| Key Metric | Current Value (2025) | Market Impact |
|---|---|---|
| Average Regional Price | €3,009-€3,423/m² | 3rd highest in Spain after Balearic Islands and Madrid |
| Annual Price Growth | 5.4%-8.9% year-on-year | Strong upward momentum driven by supply constraints |
| Gipuzkoa Province | €3,389-€3,891/m² | Highest prices due to San Sebastián coastal premium |
| New vs Existing Homes | New: +13.6%, Existing: +7.4% | New construction leading price appreciation |
| Mortgage Rates | 2.5%-2.8% fixed rates | ECB rate cuts improving affordability |
| Foreign Investment ROI | 5.5% average return | Attracting international buyers and investors |
| Rental Yields | 5.2%-5.5% | High demand supporting strong rental returns |
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
What are the current average property prices in the Basque Country as of June 2025?
The average price for residential properties in the Basque Country has reached €3,009-€3,423 per square meter as of mid-2025.
By province, the price variations are significant. Gipuzkoa leads with prices ranging from €3,389 to €3,891 per square meter, with Donostia-San Sebastián commanding premium rates of €6,789/m². Bizkaia follows at €3,296/m², with affluent areas like Getxo reaching €4,558/m². Álava remains the most affordable province at €2,379-€2,750/m².
These prices position the Basque Country as the third most expensive region in Spain, behind only the Balearic Islands and Madrid. The regional average represents a substantial increase from approximately €2,400/m² in 2020, marking a 25% appreciation over five years.
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How much have property prices increased in the Basque Country during 2024-2025?
Property prices in the Basque Country have experienced robust year-on-year growth of 5.4% to 8.9% between 2024 and 2025.
The growth varies significantly by province. Gipuzkoa leads with a 9% annual increase, followed by Bizkaia at 8.2%, while Álava shows more moderate growth at 4.7%. New construction properties are driving the strongest price appreciation, with new-build prices rising 13.6% in 2024 compared to 7.4% for existing homes.
This represents the largest price increase since 2007, according to INE data. The House Price Index for new homes reached 159.41 in 2023, compared to 131.58 for existing homes, confirming that new builds are experiencing faster appreciation rates.
Several municipalities have recorded exceptional growth rates. Santurtzi leads with a 19% annual increase, followed by Laudio/Llodio at 17.8%, Sestao at 16%, and Bergara at 13.9%.
Which cities and areas in the Basque Country are seeing the fastest price growth in 2025?
Gipuzkoa province, particularly Donostia-San Sebastián and coastal towns, is experiencing the most dramatic price increases.
Donostia-San Sebastián remains the most expensive city with average prices of €6,789/m², making it one of the costliest cities in Spain. Zarautz has also reached over €6,500/m², reflecting the premium for coastal locations. The high-speed rail connections are further boosting property values in well-connected towns.
Several smaller municipalities are recording exceptional growth rates. Santurtzi leads the region with a 19% annual increase, while Laudio/Llodio follows at 17.8%. Sestao (16%), Bergara (13.9%), Bermeo (13.2%), and Barakaldo (12.5%) are also experiencing double-digit price appreciation.
The tourism factor plays a crucial role in these price increases. San Sebastián has been officially declared a "tensioned residential market" due to its housing affordability crisis, with average rents reaching €1,037 per month in 2023, marking a 13.6% increase over five years.
What are the property price forecasts for the Basque Country through 2026?
BBVA Research projects continued price growth of 7.3% in 2025 and 5.3% in 2026 for Spain overall, with the Basque Country expected to follow similar trends.
Multiple forecasting institutions confirm this optimistic outlook. CaixaBank Research expects 4% nominal growth in 2025, outpacing inflation (1.9%) and GDP growth (2.1%). Bankinter predicts a 5% rise in house prices for 2025, followed by a gradual market moderation reaching just over 3% in 2026.
The continued growth is supported by several factors. Limited land availability for new developments, geographical constraints, and regulatory hurdles are restricting supply expansion. Meanwhile, demand remains strong due to improved economic conditions, lower interest rates, and sustained foreign investment.
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Which property types are experiencing the biggest price surges in the Basque Country?
New construction properties are leading the price appreciation in the Basque Country, significantly outpacing existing homes.
New-build properties recorded a 13.6% price increase in 2024, compared to 7.4% for second-hand homes. This trend reflects strong demand for modern amenities and energy-efficient features that buyers increasingly prioritize. The House Price Index for new homes reached 159.41 in 2023, representing a 59% increase since 2015.
Coastal properties and beachfront apartments continue to command premium prices, particularly in tourist hotspots. Properties with high-speed internet connectivity are experiencing a 4% increase in demand, driven by remote work trends and the region's appeal for secondary residences.
There's also growing demand for properties offering flexibility in interior design. Adaptable spaces that allow for home offices or multifunctional areas have gained popularity, reflecting the need to balance work and personal life within the home.
How are current mortgage rates affecting property purchases in the Basque Country?
The European Central Bank's rate cuts have significantly improved mortgage affordability, with fixed-rate mortgages now available below 2.5-2.8%.
The ECB lowered its policy rate to 2.25% by April 2025, making borrowing more attractive for property buyers. This represents a substantial improvement from the higher rates of 2022-2023, when many potential buyers were priced out of the market. Spanish mortgage rates are currently averaging 3.14% nationally, with the Basque Country closely aligned at 3.2%.
Lower borrowing costs are sustaining high transaction volumes and supporting further price increases. The improved lending conditions are particularly beneficial in undersupplied markets like the Basque Country, where demand consistently outstrips available inventory.
Mortgage approvals are increasing as rates decline, with experts forecasting continued improvements throughout 2025 and stabilization around 2% by 2026. This monetary policy environment is expected to maintain strong demand for property purchases.
What role is foreign investment playing in Basque Country property price increases?
Foreign investment is a significant driver of price escalation, with the Basque Country attracting €16.7 billion in FDI between 2014-2022 and continued strong international demand in 2025.
The region offers an average return on investment of 5.5% for foreign buyers, making it attractive compared to other European markets. International investors are particularly drawn to the area's economic stability, high rental yields, and tax incentives for property buyers, including reduced VAT on home purchases.
Foreign demand is especially concentrated in coastal and urban hotspots, driving up prices for both new and luxury properties. Cities like San Sebastián and coastal towns are experiencing particular pressure from international buyers seeking vacation homes and investment properties.
Despite Spain eliminating the real estate investment option from its Golden Visa program in April 2025, existing visa holders and previous applicants retain their rights, and overall foreign investment appetite remains strong in the Basque Country.
How is tourism impacting residential property prices in Basque Country cities?
Tourism is a major factor driving price escalation, particularly in San Sebastián, which has the highest property prices in Spain at €5,370/m².
High tourism demand in coastal cities is converting residential properties to tourist accommodation and short-term rentals, reducing available housing stock for residents. This phenomenon has led San Sebastián to be officially declared a "tensioned residential market," enabling policy interventions to expand affordable housing and regulate short-term rentals.
Vacation rentals in the Basque Country command weekly rates ranging from €92 to €643, showing strong demand for short-term stays. This lucrative short-term rental market often provides higher returns than traditional long-term rentals, encouraging property owners to shift their focus away from residential housing.
The tourism effect is creating a gentrification pattern in popular neighborhoods. In areas like Gros and the city center of San Sebastián, 20-25% of the population has had to relocate due to rising housing costs driven by tourism-related property conversions.
We made this infographic to show you how property prices in Spain compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It's an easy way to spot where you might get the best value for your money. We hope you like it.
What is the current supply and demand situation for properties in the Basque Country?
The Basque Country faces a significant supply shortage with demand consistently outstripping available inventory, creating upward pressure on prices.
New construction permits are increasing, with a projected 6% rise in 2025 according to the "Eraikuntza Jasangarriaren Ibilbide Orria 2025" plan. However, new housing supply remains below household formation rates, maintaining the supply-demand imbalance. Spain constructs fewer homes per 1,000 inhabitants than most European countries, making new housing a scarce commodity.
The limited supply is exacerbated by geographical and regulatory constraints unique to the Basque Country. Mountainous terrain, coastal protection regulations, and strict urban planning rules limit developable land. Construction costs remain 30% above 2019 levels, further constraining new supply.
Property transactions increased by 5% in 2024 compared to 2023, with the first quarter showing a 25.5% jump from late 2023. Despite increased activity, available housing stock experienced a 16% annual decline, marking the steepest drop in recent years.
How do Basque Country property prices compare to other Spanish regions in 2025?
| Region | Avg. Price (€/m²) | YoY Growth | National Rank |
|---|---|---|---|
| Balearic Islands | €4,907 | 22.2% | 1st |
| Madrid | €4,624 | 14.3-20.2% | 2nd |
| Basque Country | €3,423 | 8.9% | 3rd |
| Catalonia | €2,954 | 5.9-12.8% | 4th |
| Canary Islands | €2,901 | 13.2% | 5th |
The Basque Country ranks as the third most expensive region in Spain for residential property, positioning it ahead of traditional markets like Catalonia but behind the Balearic Islands and Madrid.
While the Basque Country's price growth of 8.9% is robust, it's more moderate than the explosive growth seen in Valencia, the Balearic Islands, or Madrid. This suggests a more sustainable appreciation pattern driven by fundamental economic factors rather than speculative activity.
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What impact is the post-COVID economic recovery having on Basque Country property prices?
The Basque Country's strong economic rebound post-COVID is fueling renewed housing demand and supporting continued price growth.
The region's economic resilience is evident in its recovery trajectory. While economic growth was slightly below the national average in 2024, it's expected to match national averages by 2025, thanks to strong performances in residential construction and services sectors. This economic stability is boosting buyer confidence and sustaining property demand.
Job creation and renewed urban migration are driving housing demand as people return to cities. Over 71% of the population lives in urban areas, intensifying demand for centrally located properties. The combination of economic recovery and demographic trends is creating sustained pressure on housing markets.
Remote work patterns established during the pandemic continue to influence buyer preferences. Properties offering home office capabilities and high-speed internet connectivity are experiencing increased demand, with a 4% surge in demand for properties with robust digital infrastructure.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Based on comprehensive analysis of current market data, property prices in the Basque Country are definitively rising and expected to continue this trajectory through 2026. The region shows all indicators of a robust, expanding market with sustainable growth fundamentals.
The combination of limited supply, strong economic recovery, favorable financing conditions, foreign investment, and tourism demand creates a compelling case for continued price appreciation. While growth rates may moderate slightly in 2026, the overall trend remains firmly upward.
Sources
- 11 stats for the Basque Country real estate market in 2025 – Investropa
- 17 trends for 2025 in the Basque Country property market – Investropa
- San Sebastián becomes first Basque capital declared a 'strained housing market'
- Basque Country Spain Real Estate Report - My Dolce Casa
- Spanish property prices forecast to rise over next two years - BBVA Research
- Spain's Residential Property Market Analysis 2025
- The rally in Spain's real estate market gathers pace
- Spain's housing in 2025: rising prices from rate cuts and population growth