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What is happening in Galicia’s real estate market? Are prices going up or down? Is Santiago de Compostela still a hotspot for foreign investors? How is Galicia’s government impacting real estate policies and taxes in 2025?
These are the questions everyone is asking us every day—professionals, buyers, and sellers alike, from A Coruña to Vigo and beyond. Perhaps you’re wondering the same thing.
We know this because we stay deeply connected with local professionals and people like you, diving into the Galician real estate market every single day. That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market trends and dynamics.
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) Virtual property tours will become common in Galicia, aiding remote buying decisions for international investors
Virtual property tours are booming in Galicia, thanks to real estate agencies embracing this tech-savvy approach.
In Galicia, companies like Gekkota-3D-VirtualTours in Vigo are leading the charge with immersive 3D virtual reality tours that make online property viewing a breeze. This is a game-changer for international buyers who can't always visit in person.
Foreigners are snapping up luxury homes in Galicia, making up 72% of these purchases in early 2024. This surge in international interest is partly due to the ease of virtual tours, which allow buyers to explore properties from anywhere in the world.
Homebuyers are increasingly favoring virtual tours over static photos. A significant 67% of buyers want virtual tours when browsing listings, and half of them prefer these tours to photos alone. This shift is pushing real estate platforms to make virtual tours a standard offering.
Advancements in virtual reality and 3D imaging are making these tours more lifelike and engaging. With better internet access and digital skills, international investors find it easier to use virtual tours for making informed decisions without setting foot in Galicia.
Sources: PhotoUp, Idealista, Gekkota 3D
2) Santiago de Compostela’s rental market will grow with more students and tourists arriving
The rental market in Santiago de Compostela is set to thrive thanks to a surge in students and tourists.
With over 25,500 students enrolled at the University of Santiago de Compostela during the 2021-2022 academic year, there's a strong demand for housing, especially near the campus. This bustling student community is always on the lookout for convenient and affordable places to live, making the area around the university a hot spot for rentals.
Tourism is also playing a big role in this rental boom. In August 2024, Santiago de Compostela saw 101,524 visitors, a noticeable jump from the previous year. This influx of tourists, many of whom are international, adds to the city's lively atmosphere and increases the need for short-term rental options.
As both students and tourists flock to the city, rental prices are climbing. By October 2024, the average rental price hit €9.80 per square meter, up by 3.16% since December 2023. This rise in prices highlights the growing competition in the rental market, with fewer properties available to meet the high demand.
For those considering investing in property here, it's worth noting that the rental market is becoming increasingly competitive. The limited availability of properties is pushing prices up, making it a potentially lucrative opportunity for landlords.
Whether you're a student looking for a place to stay or a tourist seeking a temporary home, Santiago de Compostela's rental market is bustling and full of opportunities. The city's vibrant culture and economic growth make it an attractive destination for both living and visiting.
Sources: Indomio, University of Santiago de Compostela, Vialusitana
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Spain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Galicia will attract more foreign buyers with its affordable properties and unique cultural charm
Foreign buyers are eyeing Galicia for its affordable homes and rich cultural vibe.
In Galicia, property prices average around $1,600 per square meter, making it a budget-friendly option compared to places like Madrid and Barcelona. This affordability is a big draw for those looking to invest in a charming yet cost-effective location.
Galicia's allure isn't just about price; it's also about its growing tourism scene. In 2024, the region saw a surge in visitors, with over 500,000 pilgrims walking the Camino de Santiago. This iconic route is a major cultural magnet, pulling in people from all over the world.
What's interesting is that 58% of these pilgrims were international visitors, showcasing Galicia's global appeal. The region's unique blend of history, culture, and natural beauty is hard to resist for those seeking a different slice of Spain.
Beyond the Camino, Galicia offers a mix of coastal and rural landscapes that are perfect for those wanting a peaceful retreat. The combination of affordable real estate and cultural richness makes it a standout choice for foreign buyers.
With its rising popularity, Galicia is becoming a hotspot for those looking to invest in a place that offers both value and a unique lifestyle. The trend of increasing foreign interest in Galician properties is set to continue as more people discover what this region has to offer.
Sources: Cluster Turismo Galicia, Galicia Property, International Living
4) Property prices in Galicia's interior will drop as younger people move to urban areas
In Galicia's interior, property prices are dropping as young people head to the cities.
Many young folks are leaving these rural areas, drawn by better job prospects and lifestyle perks in bustling cities like A Coruña, Vigo, and Santiago de Compostela. This shift isn't just hearsay; it's backed by reports from CaixaBank Research, which highlight a steady decline in the younger population in these regions.
Urban centers are booming with opportunities, and job growth is thriving there. Economic reports from 2023 and 2024 show that these cities are becoming magnets for young professionals, thanks to their vibrant economies and modern amenities.
With fewer people sticking around, the real estate market in Galicia's interior is feeling the pinch. Demand for property is dwindling, leading to a noticeable drop in prices. Late 2023 saw a dip in average land prices, reflecting this trend.
Comparative studies reveal that rural areas like Extremadura and Castilla-La Mancha are experiencing similar patterns. House prices in these regions are lower and show little sign of rising, unlike their urban counterparts.
For potential buyers, this means that investing in Galicia's interior could be a bargain, but it's essential to consider the long-term implications of a declining population. Urban migration is reshaping the landscape, and understanding these dynamics is key to making informed decisions.
Sources: Global Property Guide, CaixaBank Research, BBVA Research
5) Rental yields on the Galician coast will rise moderately as short-term vacation rentals gain popularity
The Galician coast is experiencing a moderate increase in rental yields thanks to the rising popularity of short-term vacation rentals.
In recent years, cities like Vigo, Sanxenxo, and Viveiro have become hot summer destinations, driving up demand for short-term rentals. This trend is evident with a 77.2% jump in Airbnb occupancy rates in northern Galicia compared to the previous month in 2023.
Tourist numbers are climbing, with 184,325 visitors recorded in July 2024, fueling the need for short-term accommodations. In Santiago de Compostela, vacation rentals boast a median occupancy rate of 63%, outpacing traditional long-term rentals.
Platforms like Airbnb are reshaping Galicia's rental market, offering fresh opportunities for property owners and investors. Coastal towns are gaining fame for their surf tourism, which further boosts the demand for short-term stays.
Investments in infrastructure and amenities along the Galician coast are making these rentals even more attractive. The region's natural beauty and cultural richness are drawing more visitors, enhancing the appeal of owning a rental property here.
Sources: Airbtics, CEIC Data, Short Term Rentalz
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6) Property prices in Santiago de Compostela will rise as it gains popularity with international students and tourists
Santiago de Compostela is quickly becoming a favorite spot for international students and tourists, which is likely to push property prices up.
The University of Santiago de Compostela is a major draw, with over 25,500 students enrolled in the 2021-2022 academic year. This bustling student population creates a strong demand for housing, especially close to the university, making it a prime area for property investment.
Tourism is booming too, with over 101,524 visitors in August 2024 alone. This surge, especially from international tourists, is boosting the demand for short-term rentals. Investors are keen to capitalize on this trend, which can drive property prices higher.
The real estate market in Santiago de Compostela is buzzing, with property prices reaching €1,862 per square meter in October 2024. This marks a steady increase from December 2023, indicating growing interest from both local and international buyers.
With its rich history and vibrant culture, Santiago de Compostela is not just a place to visit but a place to invest. The combination of a thriving student population and a booming tourism industry makes it an attractive option for property buyers.
As more people discover the charm of Santiago de Compostela, the demand for property is expected to continue rising. This trend is likely to make the city a hotspot for real estate investment in the coming years.
Sources: Indomio, University of Santiago de Compostela, Vialusitana
7) Rural development incentives will increase interest in properties outside urban areas
Government incentives are making rural properties more appealing for potential buyers.
Take Galicia, for instance, where the Rural Development Programme has poured nearly €1.6 billion into improving rural infrastructure. This investment is transforming these areas into attractive spots for both living and investing. Imagine the charm of a countryside home with modern amenities, all thanks to these enhancements.
One enticing incentive is a personal income tax deduction of up to €400 for those buying or renovating a main residence in villages with fewer than 3,000 inhabitants. This financial perk makes the idea of moving to a quaint village more tempting, as it helps cut down the cost of property investment. Picture yourself enjoying a peaceful village life while saving money.
Projects like Biocoop and O grelo verde are shining examples of how rural areas can thrive. These initiatives not only boost the local economy but also improve the quality of life, making rural living more desirable. It's about sustainable living and economic growth, all wrapped up in a picturesque setting.
With these incentives and successful projects, rural areas are becoming hotspots for those seeking a change of pace. The combination of financial benefits and improved infrastructure is drawing more people to consider the countryside as a viable option for their next home.
As more people discover the benefits of rural living, the demand for properties in these areas is likely to rise. The government's push for rural development is not just about infrastructure; it's about creating vibrant communities where people want to live and invest.
Sources: Agriculture EU, IFSA Proceedings, Idealista
8) German buyers will increasingly seek investment opportunities in Galicia's less crowded areas
German investors are increasingly eyeing Galicia for real estate opportunities.
In recent years, especially in 2023 and 2024, there's been a noticeable shift among German investors towards less crowded areas. They're keen on diversifying their portfolios and finding properties that offer both lifestyle perks and investment potential. Galicia, with its stunning landscapes and rich culture, fits the bill perfectly.
German enterprises are actively investing abroad, with Europe as a prime focus. In 2023, they poured about €76 billion into European countries, including Spain. This substantial flow of investment highlights a strong interest in European real estate markets. Galicia stands out due to its affordability compared to other Spanish regions.
There's also a growing trend of German expatriates moving to Spain, drawn by both lifestyle and investment opportunities. Real estate agents in Galicia have noticed an uptick in inquiries from German clients. The region's charm is amplified by social media, showcasing its unique landscapes and cultural heritage.
With its blend of natural beauty and cultural attractions, Galicia is becoming a hotspot for those seeking a quieter, yet enriching lifestyle. German buyers are particularly interested in the region's potential for both personal enjoyment and financial gain.
Sources: Bundesbank, BBVA Research, Julius Baer, City Job Offers
We have made this infographic to give you a quick and clear snapshot of the property market in Spain. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Rental yields in Galicia's urban areas will dip slightly as more properties enter the market
Urban areas in Galicia are seeing a slight dip in rental yields as more properties hit the market.
In La Coruña, for instance, over 200 new developments were recorded in 2021, leading to a surge in available properties. This increase in supply is making it a bit tougher for landlords to maintain high rental yields. As more homes pop up, renters have more choices, which can drive down what landlords can charge.
Across Spain, the real estate market is buzzing with activity. Demand and prices have shot up, but the supply hasn't quite caught up. This could mean a surplus of properties soon, which might put a damper on rental yields. According to CaixaBank Research, sales are expected to hit around 565,000 units annually, with home prices climbing by about 5% in 2024. However, this growth is predicted to slow to 2.8% in 2025, hinting at a potential oversupply.
Demographic trends are also playing a role. In 15 of Spain's 16 largest housing markets, home sales are on the decline. This suggests that demand might be waning in some areas, possibly due to population stagnation or even a decline in urban centers. Such shifts could further impact rental yields, as fewer people are looking to buy or rent.
For those eyeing property in Galicia, it's worth noting these dynamics. The market is in flux, with new developments and changing demographics shaping the landscape. While this might mean more options for buyers, it also suggests that rental yields could be under pressure as the market adjusts.
Sources: New Building Spain, CaixaBank Research, CaixaBank Research
10) Lugo's property prices will grow slower than other regions due to its traditional economy
Lugo's property prices are expected to grow more slowly than in other regions due to its traditional economy.
One reason for this is Lugo's lower population growth rate, largely because of an aging population. This trend often leads to slower economic and property market growth, as fewer young people means less demand for new housing.
Foreign investment in Lugo's real estate is also lower compared to coastal areas. While places by the sea attract more international buyers, Lugo's market remains stable but less dynamic, with historical data showing slower property price increases than other parts of Galicia.
Lugo's economy leans heavily on traditional industries, which don't grow as fast as sectors like tourism and manufacturing. This reliance keeps the economy stable but less vibrant, which in turn affects how quickly property prices rise.
Moreover, Lugo sees fewer infrastructure projects than coastal regions. This lack of development means less economic activity, which can slow down property price growth.
Sources: Bric Group, CaixaBank Research, Idealista
11) Property values in A Coruña will steadily rise with ongoing urban infrastructure and amenity development
A Coruña is set to see a steady rise in property values as it continues to enhance its urban infrastructure and amenities.
The city is buzzing with new projects, like urban gardens popping up all over, which are part of a larger plan for sustainable development. This aligns with broader European and global goals, making A Coruña a forward-thinking place to invest in property.
Recently, the property market has been on the up and up, with residential prices peaking in October 2024. This jump from last year shows a promising trend for anyone looking to buy. The local government is also making the city more pedestrian-friendly, adding more walking routes and lowering speed limits, which makes living here even more appealing.
A Coruña's population is stable and dense, which keeps the real estate market strong. The city's economic diversity and demographic trends are key factors driving the demand for homes. Plus, tourism is booming, with more visitors filling up hotels and exploring the city, which in turn boosts the local economy and property market.
With higher hotel occupancy rates and a surge in both national and international tourists, the city is thriving. This influx of visitors not only supports local businesses but also increases the demand for residential properties, making it a hot spot for real estate investment.
As A Coruña continues to develop, its blend of urban charm and modern amenities makes it an attractive place to live and invest. The city's commitment to sustainability and livability is a big draw for potential buyers, ensuring that property values will keep climbing.
Sources: Indomio, Oppla, Coruna.gal
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12) Rising international student numbers in Santiago de Compostela will boost demand for rental properties
The growing number of international students in Santiago de Compostela is reshaping the rental property market.
With the University of Santiago de Compostela welcoming more than 2,200 international students in recent years, the demand for housing is on the rise. These students often seek off-campus housing for greater privacy and independence, which means more competition for rental properties near the university.
Landlords and property managers are noticing this trend, as inquiries from international students are becoming more frequent. This shift is creating a buzz in the local real estate market, with many property owners eager to tap into this growing demand.
In college towns like Santiago de Compostela, it's common for rental prices to climb as student demand outpaces supply. This is especially true in areas close to the university, where rental prices tend to increase as more students look for housing options.
As a result, the local real estate market is seeing a surge in rental property listings aimed at students. Landlords are recognizing the potential for higher returns and are adjusting their strategies accordingly.
For those considering investing in property here, understanding these dynamics can be key. The influx of international students is not just a temporary trend; it's a significant factor that is likely to continue shaping the rental market in Santiago de Compostela.
Sources: 4icu.org, DoorLoop, StudiesIn.com
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.