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What will happen in the Basque Country’s real estate market? Will prices rise or fall? Is Bilbao still a prime location for foreign investors? How are local government policies and taxes shaping the real estate landscape in 2025?
We’re frequently asked these questions because of our deep involvement in this market. Through our collaborations with notaries, real estate agents, and clients purchasing properties in the Basque Country, we’ve gathered firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
1) Property prices in the Basque Country will rise moderately due to high demand and limited supply
The Basque Country is seeing a steady rise in property prices, especially in cities like San Sebastián and Bilbao.
In 2023, the house price index hit a 10-year high, with new builds getting pricier faster than older homes. San Sebastián alone has seen a 12.1% jump in housing prices since 2015, making it a hot spot for real estate.
One big reason for this price hike is the region's geographical constraints. There's just not enough land available for new developments, which means fewer homes and higher prices.
The Basque Country is also one of Europe's most urbanized areas, with many people living in cities. This high population density, along with economic growth and job opportunities, keeps the demand for housing strong. Local real estate agents are seeing lots of transactions, showing a bustling market.
In Bilbao, for instance, the mix of cultural attractions and business opportunities makes it a magnet for both locals and newcomers. This adds to the pressure on housing availability, pushing prices up even more.
With limited space and high demand, the Basque Country is likely to see a moderate increase in property prices in the coming years.
Sources: Statista, Iberian Property, Properstar
2) Rental yields in Basque Country will rise steadily as more people choose renting over buying
The real estate market in the Basque Country is seeing a steady rise in rental yields as more people choose to rent instead of buy.
In Vitoria, the rental scene is buzzing with up to 70 applicants vying for each rental property. This surge in demand is largely fueled by younger folks who prefer renting, often because they lack the financial means or job stability to buy a home.
High property prices are a big factor too. Apartments in the Basque Country have a median price of €2,951/m², while houses go for about €1,617/m². For many, these prices make buying a distant dream, pushing them towards renting as a more feasible option.
Wages aren't helping either. They've been pretty stagnant, not keeping up with the rising property costs, which makes renting even more appealing. People find it easier to manage monthly rent than to save for a hefty down payment.
Urbanization is another piece of the puzzle. Cities like Vitoria are seeing a spike in rental demand, but affordable options are hard to come by. Tourism is bouncing back, and many property owners are choosing short-term rentals for tourists, which cuts down the supply for long-term renters.
All these factors are driving up rental yields, making the Basque Country an interesting spot for property investors. With more people renting, landlords are seeing better returns on their investments.
Sources: European Conservative, Properstar, Global Property Guide
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.
3) Rental prices in Bilbao and San Sebastián will increase as demand exceeds supply
Rental prices in Bilbao and San Sebastián are climbing, and this trend shows no signs of slowing down.
In Bilbao, the city is bustling with up to 7,153 people per square kilometer, making it one of the most densely populated areas in southern Europe. San Sebastián isn't far behind, with 6,250 inhabitants per square kilometer. This high density is a key factor pushing rental prices up.
The Basque Coast's charm is drawing tourists in droves, leading to a boom in short-term rentals. These rentals are highly profitable, but they also mean fewer homes are available for long-term residents. Even though regulations were introduced in 2022 to address this, the demand for short-term stays remains strong.
New housing developments in these cities are scarce, which only adds to the problem. With more properties being snapped up for short-term rentals, locals are finding it tough to secure affordable long-term housing. This shortage is a pressing issue in both Bilbao and San Sebastián.
The Basque Country's economic growth is attracting professionals, further increasing the demand for housing. Younger people, in particular, are drawn to urban living, adding to the pressure on housing in these cities. The influx of international students and expatriates also plays a role, as they often seek accommodation in urban centers.
Sources: Sur in English, Euskadi, Live in Biarritz, InSpain News
4) More foreign buyers will diversify the types of properties available in the Basque Country market
The Basque Country is seeing a significant influx of foreign buyers, with 217,489 foreign nationals calling it home in 2024.
This diverse group includes people from Africa and Romania, among others, each bringing their own unique preferences to the property market.
Luxury real estate here is booming, offering everything from ocean-view villas to historic city residences, reflecting the varied tastes of international buyers.
Developers are keen to meet these international tastes, drawn by the Basque Country's beautiful beaches and renowned gastronomy.
With its surf-friendly waves and vibrant culture, the region is a magnet for developers looking to create properties that appeal to a global audience.
As a result, the property market is diversifying, offering a wider range of options to suit the different preferences of international buyers.
Sources: Michael Zingraf, Eustat
5) Green building tax incentives will boost sustainable housing development in Basque Country
Tax incentives are a powerful tool for promoting sustainable residential developments in the Basque Country.
The Basque Energy Strategy 2030 set the stage by providing funds to boost energy efficiency and renewable energy in buildings. This strategy included tax incentives and credits that have been pivotal in encouraging sustainable building practices.
The Energy Transition and Climate Change Plan 2021-2024 aimed to slash greenhouse gas emissions by 30% from 2005 levels and ensure that 20% of energy consumption comes from renewables. These goals underscore the importance of energy retrofits in buildings, a cornerstone of sustainable construction.
In 2022, the Basque Circular Hub opened, offering training in circular economy practices. This initiative has helped construction companies specialize in sustainable methods, supporting the growth of green residential projects.
With government backing, public interest, and industry readiness, the Basque Country is primed for sustainable residential development. The increased media coverage on green building benefits has also boosted public awareness and interest in eco-friendly homes.
These combined efforts create a favorable environment for sustainable residential developments, making the Basque Country a leader in green building practices.
Sources: Urban Klima 2050, EVE 3E2030, Investors Presentation 2024
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6) Renovations will increase as new energy rules boost the value of older properties in Basque Country
The Basque Country is buzzing with a push for energy efficiency thanks to new regulations and government incentives.
With over €86 million in grants for energy retrofitting, the Basque Government is making it easier for homeowners to upgrade their properties. This green transition is not just about saving energy; it's about boosting the value of older homes.
Since the 2023 tax code reforms, the number of homes qualifying for energy upgrades has more than doubled. This shows a clear link between energy efficiency improvements and rising property values.
The University of the Basque Country has developed a nifty simulation tool that helps plan the decarbonization of housing. This tool highlights the economic benefits of renovation, proving that energy-efficient upgrades can indeed enhance property value.
People in the Basque Country are catching on, with 82% of survey respondents recognizing the importance of environmental protection. This growing interest in energy-efficient homes is another reason property values are climbing.
As more buyers seek out energy-efficient properties, the demand is driving up prices, making these homes a hot commodity in the market.
Sources: Agree Basque Country, University of the Basque Country, Basque Energy Transition
7) Demand for Basque Country properties will rise as more foreign buyers seek its unique culture and lifestyle
Foreign buyers are flocking to the Basque Country, drawn by its unique cultural and lifestyle offerings, which is pushing up property demand.
In 2023, even though there was a 10.8% drop in average property prices paid by foreigners, British and French investors kept their interest strong. This shows that the region still holds a special appeal for them. The Basque Country is not just about beautiful landscapes; it's a place where you can enjoy a rich cultural tapestry and a vibrant lifestyle.
The region's charm was further recognized when it was named a Best European Destination in 2024. This accolade highlights its luxury living, high-end amenities, and rich cultural and gastronomic experiences. It's a place where you can savor world-class cuisine and enjoy a lifestyle that many dream of.
Economic growth and stability are also key factors making the Basque Country attractive. The region saw a significant recovery in tourism expenditure, reaching 6,139 million euros in 2023. This marks a 29.6% growth from the previous year, showing that more people are discovering what the Basque Country has to offer.
Inbound tourism also grew by 32.0%, reflecting the region's increasing allure to international visitors. This growth in tourism is not just about numbers; it's about people experiencing the unique blend of tradition and modernity that the Basque Country offers.
8) Younger buyers will flock to Bilbao’s historic neighborhoods as interest in cultural heritage grows
Bilbao's historic neighborhoods are buzzing with a new wave of younger buyers drawn to the area's rich cultural heritage.
The Guggenheim Museum Bilbao has played a huge role in this transformation, boosting property values and making these areas more appealing. In 2023, the museum's impact was massive, adding 657.6 million euros to the GDP and giving the real estate market a significant lift.
Urban renewal projects are also a big draw. In 2024, there was a surge in efforts to revitalize Bilbao's historic neighborhoods. These projects, like turning the Alhóndiga into a cultural hotspot, have made these areas more vibrant and attractive to potential buyers.
Young people are flocking to cities, and Bilbao's historic areas offer the perfect mix of old-world charm and modern living. This blend is exactly what younger buyers are looking for, as they crave culturally rich environments.
Surveys from 2024 show that younger buyers have a strong preference for living in culturally vibrant areas. This trend is clear in Bilbao, where historic neighborhoods are becoming the go-to spots for this demographic.
Sources: Travel and Tour World, Guggenheim Museum Bilbao, Resonance Co.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Spain. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
9) Demand for eco-friendly homes in Basque Country will rise sharply as people become more environmentally conscious
The demand for eco-friendly homes in the Basque Country is on the rise as more people become environmentally conscious.
In recent years, there's been a noticeable uptick in building eco-friendly homes, with many embracing Secondary Raw Materials (SRM) for construction. This shift is backed by a significant portion of the population, showing a clear move towards sustainable building practices.
The Basque Government is also playing a big role in this green shift. Their Energy Transition and Climate Change Plan 2021-2024 is pushing for a 30% cut in greenhouse gas emissions and a boost in renewable energy use. This aligns perfectly with what homebuyers are looking for—energy-efficient homes.
Local initiatives like the Circular Economy and Bioeconomy Plan are positioning the Basque Country as a leader in sustainable urban planning. This is not just about reducing emissions; it's about creating a whole new way of living that's in harmony with the environment.
Companies like Patxa’ma are seeing a surge in sales of sustainable building materials, indicating a growing market for eco-friendly construction. The buzz around climate change and sustainable living is everywhere, from media to educational programs, making people more aware of the benefits of eco-friendly homes.
All these factors are coming together to suggest that the demand for eco-friendly homes in the Basque Country will continue to grow as people become more environmentally aware.
Sources: Tecnalia, Basque Invest, Urban Klima 2050, Bioregions
10) Demand for smaller, accessible homes in Basque Country will grow as the population ages
The Basque Country is seeing a big change in its population, with more people aged 65 and over than ever before.
By 2031, this age group is expected to make up 28.2% of the population, up from 22.5% in 2020. This shift means there's a growing need for homes that are not just smaller but also easier to navigate.
Older adults often look for homes that are simple to maintain and have features like ramps and wider doorways. The Basque Government is on it, with projects like Etxegoki in Bilbao, which offers assisted apartments tailored for accessibility.
There's also a push to adapt existing housing. The government is turning unused plots into modern, accessible homes, which helps free up larger homes for younger families.
As more people age, the demand for these types of homes is only going to increase. The Basque Country is already seeing a shift in its housing market to meet these needs.
Expect to see more developments that cater to this demographic, as the region continues to adapt to its aging population.
Sources: Shape Affordable Housing, Eustat, Silver Eco
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.