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Thinking about buying a 3-bedroom apartment in the Malasaña neighborhood of Madrid? It’s a vibrant area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other barrios like Chamberí or Salamanca where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Spain Property Pack.
Will property prices increase in Spain in 2025?
Yes, property prices in Spain are expected to rise in 2025, driven by a combination of strong demand and favorable economic conditions.
Backed by our fresh, in-depth market analysis, we’re confident that Spain remains an attractive destination for both domestic and international property investors.
While there are some economic challenges like inflation and potential interest rate fluctuations, the main drivers behind Spain’s property price growth are robust and enduring.
Demand, particularly in popular coastal and urban areas, continues to outpace supply, making significant price declines unlikely. Additionally, Spain's appeal as a tourist and expatriate destination continues to attract buyers from around the world.
Signals pointing to a property price increase in Spain
Here are some factors suggesting prices could increase:
The ongoing shortage of new housing developments, especially in high-demand areas like Madrid, Barcelona, and the Costa del Sol, is expected to persist into 2025. This limited supply, coupled with steady demand, is likely to drive prices upward.
Spain's economy is projected to continue its recovery, with GDP growth and employment rates improving. A stronger economy generally boosts consumer confidence and purchasing power, leading to increased demand for property.
The Spanish government is expected to introduce new incentives for sustainable and energy-efficient housing, which could increase the value of properties that meet these criteria, thereby pushing overall market prices higher.
Foreign investment in Spanish real estate remains strong, particularly from buyers in the UK, Germany, and Scandinavia. This international interest is expected to continue, supporting price growth in key regions.
The trend of remote working is encouraging more people to relocate to Spain for its favorable climate and lifestyle, increasing demand for residential properties, particularly in coastal and rural areas.
Tourism, a major driver of the Spanish economy, is expected to rebound strongly by 2025, boosting demand for short-term rental properties and increasing property values in tourist hotspots.
Signals pointing to a property price decrease in Spain
Here are some factors suggesting prices could fall:
Potential increases in interest rates could make mortgages more expensive, reducing affordability for some buyers and potentially cooling demand.
Rising inflation and living costs could strain household budgets, particularly for middle-income families, reducing their ability to purchase property and potentially dampening demand.
Economic uncertainties, such as potential political instability or global economic downturns, could impact consumer confidence and investment in the property market, leading to a slowdown in price growth.
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If property prices go up in Spain, how much would they increase by?
If real estate prices in Spain were to rise in 2025, the increase would likely be around 3% to 7% of their 2024 values.
Typically, real estate in dynamic markets like Spain appreciates by approximately 2% to 7% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a charming 2-bedroom apartment in Madrid for 300,000 euros today, don't be surprised if it's priced between 309,000 and 321,000 euros this time next year.
To give you a better understanding, here is a table that shows 7 types of Spanish real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 2%, 5%, and 7%.
| Type of Property | Average Price in 2024 (€) | Price in 2025 (2% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Apartment in Madrid (60 sqm / 646 sqft) | €300,000 | €306,000 | €315,000 | €321,000 |
| Beachfront Villa in Costa del Sol (150 sqm / 1,615 sqft) | €1,200,000 | €1,224,000 | €1,260,000 | €1,284,000 |
| Penthouse in Barcelona (100 sqm / 1,076 sqft) | €800,000 | €816,000 | €840,000 | €856,000 |
| Studio in Valencia (30 sqm / 323 sqft) | €150,000 | €153,000 | €157,500 | €160,500 |
| Loft in Seville (80 sqm / 861 sqft) | €400,000 | €408,000 | €420,000 | €428,000 |
| Townhouse in Bilbao (150 sqm / 1,615 sqft) | €600,000 | €612,000 | €630,000 | €642,000 |
| Investment Property in Malaga (50 sqm / 538 sqft) | €250,000 | €255,000 | €262,500 | €267,500 |
Everything you need to know is included in our Property Pack for Spain
If real estate prices go up in Spain, which areas are likely to see the biggest increases?
Today, people who want to move to Spain want the charm, but they also want modern conveniences and vibrant social scenes, which Malasaña in Madrid delivers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and El Raval in Barcelona has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Spanish market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Malasaña, Madrid | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Salamanca, Madrid | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Madrid. |
| El Raval, Barcelona | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| 22@, Barcelona | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Chamberí, Madrid | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Gràcia, Barcelona | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Lavapiés, Madrid | Medium-High | With new cultural and commercial spaces being developed, this trendy neighborhood is seeing increased demand from both residents and investors. |
| Poblenou, Barcelona | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Pozuelo de Alarcón, Madrid | Medium-High | Its proximity to Madrid, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| El Born, Barcelona | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| La Moraleja, Madrid | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Ciutat Vella, Barcelona | High | Upcoming restoration of historic sites and high-profile cultural projects are driving a renewed focus on this central, historic location. |
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation in Spain?
In 2025, Spain's real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025, especially in tech hubs like Barcelona and Madrid.
- Family-Sized Apartments in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near major cities like Madrid, Barcelona, and Valencia are seeing increased interest. Proximity to green spaces, beaches, and schools is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In dense urban areas like Madrid and Barcelona, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Spain's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the country's green goals, leading to price appreciation in this category, particularly in cities with strong environmental policies.
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